Preamble

The House met at half past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — TRANSPORT

Road Safety

Mr. Dormand: asked the Secretary of State for Transport what further proposals he has for increasing road safety; and if he will make a statement.

The Secretary of State for Transport (Mr. John Moore): The Government's road safety review is almost concluded. It aims to identify the scope for new policy initiatives. Meanwhile the vigorous application of well-established measures can achieve significant casualty reductions, particularly through safety engineering measures.

Mr. Dormand: Does not today's tragic accident on the M4 underline the continuing need for close examination of road safety? I join in the welcome which has been given to the substantial reduction in the number of road deaths over the past two years or so, but does the Secretary of State agree that one of the worst features is drunken driving, and will he take the initiative in introducing legislation so that someone who is convicted of drunken driving automatically receives a gaol sentence?

Mr. Moore: I welcome the recognition that the hon. Gentleman gives to the reduction in deaths, but, as he

rightly says, we must not be complacent. I recognise, as he does, that half of all deaths relate to drink-driving offences, so it is clearly a significant and difficult issue.
May I press on for a moment, Mr. Speaker? The hon. Gentleman mentioned the tragic events of the early hours of today, and it has not yet been possible to inform the relatives of all those involved. As the precise circumstances of the accident are not yet known, I think that both sides of the House will agree that it would be premature to comment on possible causes. The accident is being investigated by the police, and staff in my Department are helping them. I know that the House will join me in expessing condolences to those so tragically bereaved by the accident. My hon. Friend the Member for Eltham (Mr. Bottomley), who is responsible for roads, visited the scene in the early hours of this morning and has told me how promptly and efficiently, as we would expect, the police, ambulance, fire and motorway maintenance services acted. I know that all would wish to join me in paying a warm tribute to those services.

Mr. Adley: I thank my right hon. Friend for his comments, and I know that the House will want to pay tribute to him for recognising the need to make that statement in answer to the first question, which I think we would all have expected from him. Is it not extraordinary that 12 people can be killed in an accident and yet the event really passes by, almost without a mention, and tomorrow will be forgotten by all except the poor bereaved people who are left behind? Will my right hon. Friend explain to the House, or, if he cannot, will he consider why railway vehicles have to keep a safe distance between each other and must behave in accordance with signals, and passenger-carrying vehicles have to be built to a certain strength, but none of those requirements are laid upon road transport?

Mr. Moore: At this stage the House would want me to concern myself with road safety, which is the subject of the question. I recognise the fine record of our railways, but we must keep in proportion the awful tragedy which occurred in the early hours of this morning. For example, the accident rate on motorways is a third of that on all-purpose trunk routes and an eighth of that on all roads.


We must leave no stone unturned to try to sort out the problems that we face, but we must try to keep them in proportion.

Mr. Haynes: What further proposals does the Secretary of State have for cyclists, bearing in mind that a number of people, particularly those from the House, such as myself, for example, cycle back and forth and in doing so they are really taking their lives in their hands simply because the motorist could not care less about them? What provision will the Secretary of State make for cyclists, not only on the present roads, but on new roads, to give them facilities so that they can ride safely?

Mr. Moore: I welcome that question from the hon. Gentleman, who is an estimable hon. Friend in every sense of the word. He may be aware that my hon. Friend the Under-Secretary of State opened a cycle route on Friday. For the first time there is a specific reference in the Highway Code — the details of which have been laid before the House—to the role of cyclists. I am aware of the problem, because although there have been improvements in some of the statistics for road safety, pedestrians and cyclists still suffer. The hon. Gentleman may like to be reminded of the happy fact that preliminary indications suggest that in 1985 about 50 fewer cyclists died compared with 1984. However, there is still a long way to go.

Mr. McCrindle: Bearing in mind the recent departmental circular urging parents to fit child safety belts in the rear of vehicles, has my right hon. Friend noticed the article in the British Medical Journal which points out that many of those seat belts appear to be ineffectively or wrongly fitted? Does the Department have any plans to contact manufacturers and others so that what is clearly intended as a safety device turns out to be so?

Mr. Moore: I have not seen that article, but if it is serious—and it must be in that journal—I shall ask my hon. Friend the Minister with responsibility for roads to look at the issue immediately.

Mr. Frank Field: May I invite the Secretary of State to return to the substance of the initial question, which concerned the action that he intended to take over drunken driving?

Mr. Moore: That was the substance, not of the initial question, but of the supplementary question. However, I said that I accepted the point made by the hon. Member for Easington (Mr. Dormand), which was that in the case of half of all of those deaths there was a causal relationship with drink. I understand that about two-thirds of those tragic accidents happen between 10 pm and 4 am. Clearly the issue is of concern. I should like to look at it carefully, as it obviously involves the attitudes of those who drive, as well as statistics. I do not want to say more now, but I recognise the seriousness of the issue.

Sir Dudley Smith: I wish to raise an ancillary but important point. Will my right hon. Friend investigate current signposting? Is he aware that, away from motorways, signposts are often inadequate and confusing, and are a contributory cause of driving accidents?

Mr. Moore: I accept my hon. Friend's long-held interest in the subject. I shall consider that point. I was not aware that signposting was regarded as a contributory factor to accidents, but I shall certainly look into the matter.

Mr. Robert Hughes: On behalf of the Opposition, may I express our condolences to the relatives of those killed in the early hours of this morning? The Secretary of State said that the police are holding an inquiry. Will he ensure that it is as wide ranging as possible. The only thing that we seem to know about the accident is that a mini-van ended up on the opposite carriageway. Will the right hon. Gentleman pay particular regard to the adequacy of central reservation guards, in order to prevent the possibility of such an accident in future?

Mr. Moore: I am delighted at the hon. Gentleman's initial remarks, and I shall ensure that his points are pursued effectively.

Newark Relief Road

Mr. Alexander: asked the Secretary of State for Transport when he expects work on the Newark relief road to commence; and over how long a period it will last.

The Parliamentary Under-Secretary of State for Transport (Mr. Peter Bottomley): Work is expected to commence towards the end of 1987 subject to the completion of statutory procedures and the availability of funds. The construction period will he two and a half years.

Mr. Alexander: Is my hon. Friend aware that the bypass was the subject of a public inquiry in 1983, that the Department approved it in 1984, and that we are told that it will be yet another three years before work commences? Is my hon. Friend aware of the widespread anger and resentment felt by those who live and work in the centre of Newark in my constituency over that completely unacceptable delay? I must tell my hon. Friend that my constituents have not been well served in this matter by his Department.

Mr. Bottomley: I recognise how forcefully my hon. Friend has put forward the case for his constituency and his constituents. However, he will be aware of the various procedures that need to be completed. It does no one any good, particularly his constituents, if we take a short-cut or make a mistake on the remaining processes, and so leave ourselves open to challenge.

Mr. Kenneth Carlisle: Is my hon. Friand aware that that relief road is also of the greatest importance for Lincolonshire? Is he aware that the A46 between Lincoln and Newark is already inadequate? If there is to be proper economic development in Lincolnshire, there must be good communications with the midlands, and a relief road round Newark is essential to that end. Will my hon. Friend reconsider the matter to see whether there is any way of improving progress on that road?

Mr. Bottomley: I shall do as my hon. Friends ask. It is worth remembering that we need to maintain the strength of the bypass programme and that we are catching up on works which I am sad to say, went astray in the late 1970s when the roads programme was halved in real terms.

Motorways (Traffic Flows)

Mr. Chapman: asked the Secretary of State for Transport if he is satisfied with his Department's methods and record of forecasting traffic flows on motorways.

Mr. Peter Bottomley: In general, yes. We use methods which provide a sound basis for the planning of national roads.

Mr. Chapman: As the traffic forecasts on the M25, particularly on the western sections of this orbital motorway, have proved to have grossly underestimated the volume using it, does my hon. Friend agree on reflection that there must be a better way of forecasting such flows? Is that not particularly important because the provision of new roads demands long-term planning?

Mr. Bottomley: Yes. I do not think that we are too modest in saying that we try to pick up new ideas and to learn from our experiences. People accept that on occasion we overshoot or undershoot a little. We need to learn most from when we overshoot or undershoot by a great amount.

Mr. Spearing: Do not things happen rather differently? With a dense population and a demand for movement, will not roads almost inevitably fill up in proportion to the additional facilities that they provide? Is not the real answer a balanced programme for transport, including adequate public transport facilities, so that we have reliable and efficient transport by all modes and a minimum of congestion and accidents on the motorways?

Mr. Bottomley: Yes, Sir. However, as the hon. Gentleman would be the first to say, if people can get round half or part of the M25, that helps popular transport, whether by car, coach or bus.

Mr. Richard Page: As in the sections connecting with my constituency of Hertfordshire South-West, the annual traffic flows are between 25 and 40 per cent. above the original estimates, will my hon. Friend re-examine the idea of providing four lanes and, if necessary, consider using the hard shoulder under bridges, as on the continent? Since it is obvious that the forecast methods, if not the forecasters, are the same as those responsible for the original two lanes at the start of the Ml, will the Minister's Department revise those methods?

Mr. Bottomley: We shall do the best that we can, but we do not want too many stretches of motorway without hard shoulders, because they increase the safety of motorways, as my right hon. Friend said in answer to the first question. I doubt whether many people who were responsible for the early stages of the Ml are still in position, but I shall ensure that what my hon. Friend says is taken into account by me and my successors.

Mr. Pike: Will the Minister examine carefully the traffic flows on the M62? Is there not a case for another east-west motorway from Lancashire to Yorkshire? Would it not he a good idea to extend the M65 east from Colne to Yorkshire?

Mr. Bottomley: The hon. Gentleman may be right, but he should engage the attention of his hon. Friend the Member for Newham, South (Mr. Spearing), who seems to believe that this Government should not build any more roads. However, the hon. Member for Burnley (Mr. Pike) seems to think we should have better and safer roads. Once we get more through traffic on to the through routes, we shall have a chance of improving the residential areas, which will be the real solution to road safety for pedestrians and cyclists.

Mr. Ward: Will my hon. Friend re-examine the traffic forecasts for the M3, because I am sure that they are

approximately right? Is he aware that that would clearly demonstrate to him the need to complete the M3-M27 link, which has been held up by one public inquiry after another, where that short section of road is a danger to life?

Mr. Bottomley: Poor stretches between high quality roads increase the dangers because people expect good roads throughout. We shall try to complete the missing link as soon as we can.

British Rail

Mr. Ron Davies: asked the Secretary of State for Transport what representations he has received concerning the level of maintenance of British Rail rolling stock in the light of the proposed reduction in staff; and if he will make a statement.

The Minister of State, Department of Transport (Mr. David Mitchell): Since British Rail's announcement on 20 May about its future plans we have received seven letters from members of the public about the general issue of rolling stock maintenance. The level of maintenance of British Rail's rolling stock is entirely a matter for it.

Mr. Davies: Will the Minister comment on the statement made a few days ago by the president of ASLEF, Mr. Tom Clarke, that British Rail could not be trusted to put safety before cost cutting? In the light of the 50 per cent. reduction in the staff employed in wagon maintenance, and the thousands of jobs that will he lost in railway workshops in the coming months, do the Government not think that they should reconsider their priorities and start investing not only in stock but in the railway network?

Mr. Mitchell: It seems that the hon. Gentleman has not been following what has been happening in British Rail's world. Since 1979, no less than £2,500 million has been invested by British Rail. Moreover, in the past two years, I have given specific approval for the provision of 1,351 new passenger vehicles. The problem is that the new vehicles require a great deal less maintenance, which is why British Rail has reduced the range of its maintenance facilities.

Mr. Coombs: Will my hon. Friend take every possible step to ensure that he discourages actively any attempt by British Rail to seek foreign tenders for railway maintenance work?

Mr. Mitchell: I know of no proposal by British Rail to seek foreign tenders for maintenance work on British Rail.

Mr. Freud: Is the Minister satisfied that when the Channel tunnel brings about an increase in road and rail transport the recently announced closure of British Rail workshops will not jeopardise an adequately trained work force?

Mr. Mitchell: British Rail has an investment plan for the Channel tunnel involving the expenditure of about £380 million. There is no reason to believe that there will not be adequate maintenance facilities for servicing all that investment.

Mr. Bagier: Is the Minister not aware of the great number of breakdowns that take place, even of east-coast main line Intercity trains? He has made the rather complacent statement that a large amount of new


equipment is being introduced, but does he not recognise that that equipment will not remain new for ever and that it will require some maintenance at some stage? Will he review the massive cuts which his Department is planning for railway workshops?

Mr. Mitchell: My Department is not planning any cuts in maintenance workshops. It is for British Rail to match demand with the facilities that it provides. The hon. Gentleman will know that the east coast main line is the subject of the largest electrification project that British Rail has undertaken for 25 years. It has been approved by the Government and it is going ahead. In the meantime, the HSTs are being serviced as is necessary.

Mr. Waller: Will my hon. Friend take this opportunity to refute as strongly as possible the suggestion by the hon. Member for Caerphilly (Mr. Davies) that British Rail has put safety after its efforts to reduce costs? Is it not a fact that investigations into accidents which have taken place on British Rail's network show clearly that there is no pattern of reductions in safety having contributed to the accidents which have occurred?

Mr. Mitchell: My hon. Friend is right. That is borne out by the reports of my Department's inspectorate. The massive new investment which British Rail has been undertaking involves more modern rolling stock, which tends to be safer anyway.

Mr. Snape: What percentage of British Rail's locomotives and rolling stock has been constructed in the past decade? Does the hon. Gentleman feel that the percentage is satisfactory? Does he agree that the recently announced reductions in construction and maintenance staff at British Rail Engineering Ltd. will mean that British Rail will continue to have, in more ways than one, the oldest railway in Europe?

Mr. Mitchell: I do not have in my head the precise percentage of rolling stock that has been constructed over the past decade. If the hon. Gentleman cares to table a question about that, I shall be happy to answer it for him. I can — [Interruption.] If the hon. Gentleman gives notice of that question, I shall be prepared to give him an answer. I do not have the statistic in my head and I do not think that the hon. Gentleman should be surprised at that. We have considered every one of British Rail's proposals for investment in locomotives and not one of them has been turned down.

Vehicle Licence Duty

Mr. Teddy Taylor: asked the Secretary of State for Transport what steps he plans to take to curb the evasion of vehicle licence duty; and if he will make a statement.

The Parliamentary Under-Secretary of State for Transport (Mr. Michael Spicer): The evasion rate is now 4 per cent. As a result of recent strong action, the number of offenders prosecuted or dealt with by out-of-court settlements was 9 per cent. up on the previous year and over 60 per cent. higher than in 1982. Further steps to deter evaders are being taken this year.

Mr. Taylor: The rate of evasion is quite alarming. It amounts to almost £100 million every year. As it is unreasonable to expect the police to chase up that evasion when they have so much on their plate, has the time not come to consider putting the costs of vehicle excise duty on to the price of petrol?

Mr. Spicer: I agree entirely with my hon. Friend the Member for Southend, East (Mr. Taylor) that the evasion rate of 4 per cent. is still too high. He is quite correct to say that the tax evaded amounts to £100 million. My hon. Friend asked whether we should abolish vehicle excise duty. By taking up the plan which he suggests, 38p would be added to the price of a gallon of petrol. Therefore, the Government have no present plans to abolish VED.

Mr. Anderson: May I remind the Minister that on 24 October last year—I refer to column 489 of the Official Report—the Secretary of State, when he was Financial Secretary to the Treasury, informed me that he would draw to the attention of the Minister of Transport the fact that an additional 300 staff in the DVLC would, as he put it, produce the maximum net revenue from enforcement, and that in October last year that increase in staff was being seriously considered. Does the right hon. Gentleman not have a unique opportunity now, since his transformation, to do something positive about that and to save the public money?

Mr. Spicer: My right hon. Friend the Secretary of State for Transport has just informed me that he is looking forward to visiting, at the earliest possible opportunity, the DVLC. This year we have already appointed 75 extra personnel for enforcement.

Mr. Peter Bruinvels: I hack up what my hon. Friend the Member for Southend, East (Mr. Taylor) said. Surely my hon. Friend agrees that 38p seems an incredibly high additional sum to be put on the price of a gallon of petrol. The police are disturbed from carrying out their normal duties by having to check licences, far too many of which are out of date. An amount of £100 million is involved. Will my hon. Friend reconsider the matter and place in the Library the exact breakdown of how he calculates the sum of 38p?

Mr. Spicer: My hon. Friend does not like the fact that it would involve an extra 38p. However, the figure has been well established. If I can provide further details about how the computation has been made, I shall do so.

Mr. Tony Banks: Is the hon. Gentleman aware that my predecessor as the Member of Parliament for Newham, North-West was a great campaigner against road fund licence fraud until, unfortunately, he was caught out? I believe that a Guinness bottle label was placed where the excise licence should have been. Is the hon. Gentleman aware that in the underground car park below the House of Commons a large number of cars do not bear current tax discs? [HON. MEMBERS: "Oh!") Nothing unlawful is being done, but a number of hon. Members are using the car park as a long-term car park. Does the hon. Gentleman not feel that those hon. Members should pay a road fund licence also?

Mr. Spicer: Yes, Sir.

London Buses and Underground

Mr. Greenway: asked the Secretary of State for Transport what is his latest estimate of the number of passengers using London buses and the London Underground; what were the comparable figures in each of the past five years; and if he will make a statement.

Mr. David Mitchell: In 1985–86 there were some 1,160 million passenger journeys on the buses — 7 per cent.


more than in 1981 — and 740 million on the underground— 37 per cent. more than in 1981, and the highest level ever. I am delighted at LRT's success in continuing to attract passengers while making major improvements in efficiency. This year revenue subsidy will be slashed to some £79 million compared with £230 million planned by the GLC.

Mr. Greenway: Is not that remarkable increase in the number of passengers using buses and underground trains in London a matter for great congratulation? Does my hon. Friend recall how the GLC—not lamented—which in 1981 doubled the fares as well as Londoners' rates, said that, with the removal of London Transport from the GLC, there would be massive accidents on the roads, race riots and all the rest? [Interruption.]

Mr. Speaker: Order. Relevance, please.

Mr. Greenway: Those are some of the things that the GLC said. Will my hon. Friend predict the likely increase in passenger use of London Transport in the coming year?

Mr. Mitchell: I expect that there will be about the same number of bus passenger journeys and an increase from about 672 million to 740 million Underground passengers. Clearly that will be an all-time record number of passengers. The financial burden borne by ratepayers and taxpayers has decreased by 1p in the pound and the level of revenue support needed has been halved in one year.

Mr. Stott: I recognise that there has been an increase in usage of the tube and buses in London, but does the Minister accept that, since the Government took control of London Transport, fares have increased by 16 per cent. that 3 million bus miles have been lost, that Londoners are paying an additional £1 million in rates — despite the Government's promises—and that the child's fare has increased by 50 per cent.? That is not a particularly good record.

Mr. Mitchell: Most of the improvements have been brought about by increased efficiency. Fare increases have been in line with inflation. That is an extremely good record. The massive increase in the number of passengers shows that the fare levels are attractive to them.

Dartford Tunnel

Mr. Proctor: asked the Secretary of State for Transport when he expects to announce his decision as to which contender has won the contract to construct a further crossing at Dartford on the M25; and if he will make a statement.

Mr. Moore: I am pleased at the interest shown by promoters in this very important project. The bids they submitted are being carefully examined. I hope to announce the result before the end of July.

Mr. Proctor: In view of the great importance to Essex and other counties and to all users of the M25 through the Dartford tunnel, will my right hon. Friend assure the House that there will be no delay in the construction of a third crossing at Dartford?

Mr. Moore: I recognise the great importance of that to which my hon. Friend draws attention from the point of view of potential users. I can give him that assurance. Obviously I shall seek to ensure that the decision comes before the House as quickly as possible.

Mr. Squire: As one who also represents a constituency near the Dartford tunnel, I assure my right hon. Friend that, for much of the day, there are considerable delays on the north side of the tunnel. Allowing for the usual time lag between contracts coming into play and construction taking place, I can only underline the comments of my hon. Friend the Member for Billericay (Mr. Proctor). A third crossing is needed, yesterday.

Mr. Moore: I note my hon. Friend's comment. I have agreed to meet the Essex and Kent local authorities on 1 July, because I recognise the critical importance of this project.

Mr. Tony Banks: Will the right hon. Gentleman give an undertaking that any new tunnel will not carry toll charges? Perhaps the passage of vehicles could be greatly speeded up if the present toll charges for travel through the Dartford tunnel were removed.

Mr. Moore: I shall give no such undertaking. I cannot comment on the Government's position on tolls in advance of our response to the report on tolls by the Select Committee on Transport.

Mr. Couchman: Will my right hon. Friend. in considering this important addition to the roads through Kent which affect my constituency, take note of the appalling state of the M2, which links with the M25 and the Dartford tunnel as the route to the north? Will he ensure that this important artery from the Channel is considered in some depth at an early stage by his Department?

Mr. Moore: I know that my hon. Friend the Minister with responsibility for roads has listened carefully, as I have, to my hon. Friend's comments. One of the few things that I have learnt in the past few weeks is that issues relating to transport movements in Kent are uppennost in the mind of any Minister in the Department of Transport.

Rural Bus Services

Mrs. Currie: asked the Secretary of State for Transport whether the Development Commission has made any grants for innovation in rural bus services.

Mr. David Mitchell: The Development Commission recently approved the first 13 grants—totalling £69,000 — from the rural transport development fund for minibus services, rural transport advisers and local liaison groups. It has also agreed to support a business advisory service for rural transport operators being run by the Council for Small Industries in Rural Areas.

Mrs. Currie: I welcome my hon. Friend's statement. May I invite him to come to my constituency of Derbyshire, South where, instead of getting stuck behind an almost empty heavily subsidised double-decker bus in our country lanes, he will now find himself joining in with the local services, which are now much improved and often run by minibus and minicab operators, public and private? Does he agree that the new Transport Act 1985 presents excellent business opportunities to those operating in transport in future?

Mr. Mitchell: I shall be delighted to join my hon. Friend in her constituency. I notice that what she has to say about the services there contrasts extraordinarily with what was said during the by-election by opponents of our


proposals. I am sure that the public will judge for themselves the difference between the actuality and the rumours which were spread about before.

Mr. Meadowcroft: Is the Minister aware that voluntary sector community transport projects are doing much innovative work as well and that they are not in quite the same category as those referred to by the hon. Member for Derbyshire, South (Mrs. Currie)? What links does the Minister's Department have with Community Transport UK and its local branches?

Mr. Mitchell: The Department keeps in touch with all those developments, including a range of community schemes. The Development Commission is including those sorts of schemes in its operations.

Mr. Brandon-Bravo: Does my hon. Friend agree that whether the Development Commission makes, or fails to make, a grant in any specific it should not be used as an excuse for the absence or deterioration of any rural service? Does he also agree that it is the right and proper duty of our county councils, now that they no longer use their money in a blanket subsidy way, to direct the money that used to be in their budgets for blanket subsidy specifically to ensure that there is proper provision where it is socially necessary so to do?

Mr. Mitchell: My hon. Friend is absolutely right. Operators of rural services, to which we have given particular attention, get not only the rebate of fuel duty, but 6p a mile this year from the transitional rural bus grant. My hon. Friend is completely right in identifying the substantial sums which are available to county and district councils to provide services, especially in rural areas, which would not otherwise be paying and have, therefore, not been registered as commercial services.

Mr. Robert Hughes: Is not the reality that the National Bus Company is planning to sack 10,000 of its workers and axe one bus service in three? Does that not deny the possibility or rural services surviving the Transport Act 1985? Will the hon. Gentleman publish in full the registrations on bus services, which have now been completed, on which he should have information? It is perhaps too much to expect the Secretary of State to repudiate the views of his predecessor, but will the Minister invite him to distance himself from the former Secretary of State, who said that bus operators were now free to operate the services without the constraints of a social conscience?

Mr. Mitchell: The hon. Gentleman knows very well that my right hon. Friend's last comments were taken totally out of context. Over two thirds of all routes have been registered and the remaining routes are going out to competitive tender. The hon. Gentleman cannot say that the National Bus Company is going to pay off a given number of employees until it knows how many contracts it has won when it puts in for the tenders. In the past 10 years of decline of the bus industry, the National Bus Company has paid off a far larger number than that.

Severn Crossing

Mr. Stern: asked the Secretary of State for Transport if he will defer any further development planning in relation to the second Severn crossing until a decision has been taken on the proposed Severn barrage.

Mr. Peter Bottomley: No, Sir. The consultants' study into a second Severn crossing is expected to be completed later this summer. If work were to be stopped, the valuable time lost could not be regained. I can assure my hon. Friend that if it is decided to proceed with a second crossing, adequate arrangements will be made for consultation.

Mr. Stern: As my hon. Friend is no doubt aware, the lower reaches of the River Severn and the Bristol channel are currently threatened by two major projects, both of which could have extremely damaging environmental implications, although I would accept that the second Severn crossing is of minor import compared with the proposed Severn barrage. In view of my hon. Friend's confirmation that the two will not be linked, will he confirm today that the plans for the second crossing will be so designed as to minimise any environmental impact?

Mr. Bottomley: Yes, Sir. When my hon. Friend talked of little import, I am sure he meant that the Severn crossing might be of great importance to south Wales and to Avon. What I hope he meant, which I should like to confirm, is that full account will be taken of any effect on the environment and ecology, and that having a second crossing is likely to be of far less importance to the waders and other natural life than the barrage might be. I cannot speak for the barrage, but I can speak for the crossing.

Oral Answers to Questions — ATTORNEY-GENERAL

European Assembly (Budget)

Mr. Teddy Taylor: asked the Attorney-General what progress is being made in the action he has initiated over the illegal budget approved by the European Assembly; and if he will make a statement.

The Attorney-General (Sir Michael Havers): As my hon. Friend knows, the President of the European Court granted interim measures in this case on 17 March, at the request of the United Kingdom, in effect suspending those parts of the budget contested by the Council. On 2 June Advocate-General Mancini delivered his opinion in this case. The judgment of the court is expected to be delivered on 3 July.

Mr. Taylor: I congratulate my right hon. and learned Friend the Attorney-General on the magnificent efforts that he has made to reclaim the illegal sums demanded by the European Assembly, but is he aware that the Common Market's response has been to ask Britain for an advance payment of £180 million to make that up, and more, and that the Parliament has also decided to disregard entirely the decision of the court that £27 million of taxpayers' money was fraudulently and wrongly given to European political parties? Is there nothing that the Attorney-General can do to stop the Assembly illegally and fraudulently using money provided entirely by the Parliaments of member states?

The Attorney-General: I am very grateful to my hon. Friend for what he has said, and I am very pleased that we succeeded on the interim judgment. As my hon. Friend knows, it is not the first time that we have been asked, with other member states, to make an advance payment. It has nothing directly to do with the issue. In any event, it must be a matter for my right hon. Friend the Chancellor of the Exchequer.

Mr. Marlow: If, as happens quite frequently, the Community cannot cope with its budgeting problems and requires its members to cough up what is known in the trade as a reimbursible loan, is Her Majesty's Government entitled legally to say, -No, we will not cough up," or if we did say that would we he taken to the European Court, and if that happened, what would be the outcome?

The Attorney-General: The circumstances must vary from case to case. In each case, we look at the merits. One has always to worry about the penal interest that would be awarded against us if we failed; the penal interest being the highest rate of interest prevalent at any given time within the Community. At the moment, it is over 20 per cent. in Greece.

Solicitors (Complaints)

Mr. Nicholas Brown: asked the Attorney-General if he will make a statement on the Law Society's latest proposals for dealing with complaints against solicitors.

The Solicitor-General (Sir Patrick Mayhew): Subject to the jurisdiction, civil and criminal, of the courts of law, it is for the profession to provide arrangements for handling complaints against solicitors. The latest proposals are the most recent in a series of measures promoted by the Law Society with that objective.

Mr. Brown: In the light of the comments by Coopers and Lybrand about the inefficiency of the old Professional Purposes Department, will the Government be carefully monitoring the performance of the new Solicitors Complaints Bureau? Given that complaints against solicitors now number about 9,000 per year, does the Solicitor-General think that the proposed total staffing of 150 persons to deal with those cases is sufficient? Would it not do more for public confidence in the complaints procedure if the bureau were truly independent of the Law Society?

The Solicitor-General: No profession can hope to exist immune from any scrutiny, but professions can benefit from the scrutiny of a Royal Commission, for example. That is exactly what the legal profession underwent a few years ago. The Benson Royal Commission recommended that those jurisdictions should remain within the Law Society, but that investigation and adjudication should be separated. That is what the Law Society now proposes. The investigating committee will have a majority of lay members. Of course, the Government will be interested in the progress of the new arrangements when they come into force, but it will be for the Law Society to man them properly. We shall see how it gets on.

Trespass

Mr. Adley: asked the Attorney-General if he has any plans to seek to consolidate the law relating to trespass; and if he will make a statement.

The Attorney-General: No formal consolidation is envisaged or would be appropriate. However, my right hon. Friend the Home Secretary is discussing with the police and other interested parties whether any strengthening of the criminal law is required, either by extending the proposed powers of the police in the Public Order Bill or by some limited offence of criminal trespass. In addition, the Lord Chancellor is considering possible

improvements in the civil procedure for the summary repossession of land available under order 113 of the Rules of the Supreme Court.

Mr. Adley: In thanking my right hon. and learned Friend for his answer, and while not wishing to get this out of proportion, may I ask whether he is aware that some aspects of recent mass trespass have provided evidence that provocation of the police was part of the objective of some of those involved? Will he consider the law in other democratic countries, especially our fellow members of the European Economic Community, and confirm that in his discussions with the Home Office he will raise the question of the mass use of public roads?

The Attorney-General: That is principally a matter for my right hon. Friend the Home Secretary, but we have always believed that the operational side of police work should be left to the chief constable and his senior officers. It seems to me that they have been doing a good job with the peace convoy.

Mr. Alex Carlile: Why has not the simple remedy available to owners of residential property to deal with squatters, which was provided in the Criminal Law Act 1977, been extended to the residential occupation of land?

The Attorney-General: That is one matter being investigated by the Lord Chancellor and the Home Secretary. The entire area is being examined afresh.

Mr. Key: Does my right hon. and learned Friend agree that the principal objection in this matter is that often matters of public order financially affect small tenant farmers, and that is unacceptable? Will he pass on to the Lord Chancellor the problem arising under order 113, under which a county court judge or a registrar could be used, but there is no duty judge system, as there is in the High Court, and that a speedier and cheaper method is not available?

The Attorney-General: The five-day period in order 113 is under review. The process can be speeded up in urgent cases. I shall ensure that my hon. Friend's comments are brought to the notice of the Lord Chancellor.

Mr. John Morris: Is not the real problem to ensure a balance between the rights of the owners and those who believe that they have a claim of right to a property? Is not the answer to speed up the legal process to adjudicate cases for those who are neither of those things? Is the Lord Chancellor, considering that? Should there not be a duty judge, as there is in many other areas of litigation, who sits during the vacation? In other cases, one can see a judge at night, in chambers, and obtain a temporary order. Is that not what is required?

The Attorney-General: We are considering trying to reduce the five-day period, although it can be reduced in urgent cases. The period extends for five days after service, which can make it a little longer. I shall ensure that the Lord Chancellor is aware of the right hon. and learned Gentleman's point about having readier access to a judge.

Mr. Douglas Hogg: When considering the law of trespass, will my right hon. and learned Friend ensure that temporary trespass for the purpose of crossing land is not made a criminal offence?

The Attorney-General: That is a matter for my right hon. Friend the Home Secretary. There will be many


difficulties with the introduction of criminal trespass. For example, we must cover the case of a man walking through the front door of a friend's house, thinking that he is at home, but he is not. We must consider such examples, which should never be made criminal offences.

Legal Aid

Mr. Maclennan: asked the Attorney-General when he now expects to publish the results of the review of legal aid funding.

The Solicitor-General: As soon as possible, but, it is hoped, about or soon after the end of this month.

Mr. Maclennan: Does the Solicitor-General accept that if arrangements are not made to introduce an independent element into the review of legal aid fees; there will be the gravest disquiet in the legal profession, which considers itself to be grossly under-remunerated, and—worse than that—in consequence the criminal justice system will be severely impaired?

The Solicitor-General: Tempting though it is to enter the area opened by the hon. Gentleman, his question does not really arise from the review of legal aid funding being carried out by the efficiency unit, so I think that we had better wait until a suitable occasion arises.

Mr. Aitken: Will my right hon. and learned Friend confirm that the total cost in dispute, if the whole demand of the legal profession is granted, is about £8 million or £9 million? May I urge him not to be too cheese paring about this issue, on the ground that we need and deserve a first-class prosecution and defence service in this country?

The Solicitor-General: I never believe in paring cheese, but the point does not arise out of this question. I am grateful for my hon. Friend's concern about the issue that he raises, but I had better wait for a more appropriate occasion to deal with it more fully.

Oral Answers to Questions — OVERSEAS DEVELOPMENT

African Commodity Exports

Mr. Wainwright: asked the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to international financial institutions concerning the scope for stabilising the price of the commodities which Africa exports.

The Minister for Overseas Development (Mr. Timothy Raison): None to those for which I have responsibility. They are not directly involved in commodity price stabilisation schemes.

Mr. Wainwright: Does the Minister, with his wide responsibility, agree that seemingly cheap imports of raw materials from Africa may eventually prove extremely expensive if they are bought at the price of destabilising the Western banking system by exacerbating the international debt crisis?

Mr. Raison: Obviously there is a real problem, but we believe that developing countries' commodity problems are best tackled in the context of overall economic policy. There are stabilisation schemes — for example, the European Community, STABEX and SYSM IN schemes —but assistance through bilateral aid, aid for structural

adjustment, general balance of payments support, and so on, are all very valuable in helping to deal with the problem.

Mr. Budgen: Will my right hon. Friend draw to the attention of African countries the experience of the common agricultural policy, of OPEC, and of the tin industry before they draw any general conclusions about the desirability of these various interferences in the market mechanism?

Mr. Raison: Commodity schemes are sensitive and delicate mechanisms and it is right to look at what has been happening around the world.

Mr. Deakins: Is the Minister aware that the present Government, and a Labour Government, would be committed to the United Nations integrated programme for commodities, under which there are to be stabilisation schemes? Does he not talk to his colleagues at the Department of Trade and Industry about these matters?

Mr. Raison: As I have already said, there is scope for such schemes but we must be cautious in attributing to them virtues which they cannot always carry.

Aid (Gross National Product)

Mrs. Shields: asked the Secretary of State for Foreign and Commonwealth Affairs what was the proportion of gross national product spent on overseas aid in 1985 compared with 1984.

Mr. Raison: As I informed the House on 20 June, OECD statistics show that in 1985 Britain provided net official development assistance equivalent to 0·34 per cent. of GNP. In 1984 the figure was 0·33 per cent.

Mrs. Shields: Bearing in mind that in 1979 the percentage was 0·52, why are the Government so hesitant to increase aid, especially when Sport Aid and other ventures clearly show public support for such ventures?

Mr. Raison: If the public want to support additional aid, as they certainly do, they have every chance to do so through very valuable mechanisms such as Sport Aid. In the current year there has been a substantial increase in our aid programme compared with last year, ahead of the rate of inflation, and I believe that that is widely welcomed.

Mr. Dorrell: Does my right hon. Friend accept that the decline in the offical aid programme since 1979 is regrettable? Will he confirm, however, that the total transfer, public and private, from this country to the developing world has exceeded 1 per cent. of our GDP every year since 1979? Would he care to speculate on how the proposals of the official Opposition for exchange and import controls might effect the economies of the developing world?

Mr. Raison: My hon. Friend has raised a good point, which the Opposition must answer. From the overall picture it is clear that the United Kingdom has played and is playing a significant role in helping the Third world.

Mr. Tom Clarke: In constant prices, is it not the case that since 1979 the real value of our overseas aid has fallen by 20 per cent.? How does the Minister explain that abrupt decline, and how can he say for one second that the Government intend to achieve the United Nations' figure of 0·7 per cent.? Will he come clean with the House today


and talk about the Government's record and policies, and contrast the generosity of the British people with the mean-mindedness of the Government whom he seeks to serve?

Mr. Raison: Despite what the hon. Gentleman says, I welcome him to the Front Bench for the first time in Overseas Development Question Time. Obviously, we have had to operate against the policy of the overall control of public expenditure, and it has not been possible to exempt the aid programme from that. On the other hand, we are increasing our aid programme and concentrating in particular on securing greater effectiveness. I believe that our efforts are widely appreciated.

Mr. Stanbrook: Does my right hon. Friend agree that. it is unfair that his Department should have to bear the burden, from its overseas aid funds, of the payment of pensions for retired colonial officers, almost all of whom are resident in this country?

Mr. Raison: I understand my lion. Friend's point. Both he and other hon. Friends put it to my right hon. and learned Friend the Foreign Secretary last week. It is a difficult matter, and the money must come from some departmental budget. However, I note what my lion. Friend has said.

Sport Aid

Mr. Tom Cox: asked the Secretary of State for Foreign and Commonwealth Affairs what discussions his officials have had with the organisers concerning the distribution in Africa of funds raised by Sport Aid.

Mr. Raison: I understand that the funds raised by Sport Aid for Africa are being divided equally between the Band Aid organisation and UNICEF. My officials have had discussions with Band Aid about its plans, and have offered to make available to it any technical advice which it may need. I congratulate all those who contributed to Sport Aid on their fine achievement.

Mr. Cox: I welcome the Minister's comments, but is he aware that, in the eyes of the British people, the standing of Bob Geldof on issues of aid is higher than that of his Department? Against that background, should we not be working in the closest possible co-operation with him, and, to set a real example, should not the Government match pound for pound the moneys that the British people have contributed through Sport Aid? Would that not show real commitment on the part of the Government?

Mr. Raison: I have the greatest respect for what Bob Geldof has done personally and what Band Aid and many other agencies have done. Regarding matching moneys, I understand that so far Band Aid has spent £28 million on relief in Africa. Over the past couple of years the British Government have spent £190 million one way and another on relief in Africa. Therefore, I am not sure that matching would be appropriate.

Mr. Hirst: Bearing in mind the difficulties that aid agencies have encountered in distributing aid in Ethiopia, does my right hon. Friend find it both disturbing and strange that the Marxist regime there apparently cannot feed its people, but is offering food, shelter and training to so-called freedom fighters for southern Africa?

Mr. Raison: There are many disturbing occurrences in Ethiopia. We have given great help to that country, and

we are thinking about what more we can do. However, we must recognise that we do so against a difficult political background.

Africa

Mr. Beith: asked the Secretary of State for Foreign and Commonwealth Affairs whether he has any plans to cut the amount of aid allocated to Africa; and if he will make a statement.

Mr. Simon Hughes: asked the Secretary of State for Foreign and Commonwealth Affairs if his Department plans to increase aid to Africa in the light of the United Nations Special Session on Africa; and if he will make a statement.

Mr. Raison: We shall continue to give priority to Africa in our aid programme. We shall give particular help to those countries where aid can be used effectively, especially those undertaking sensible economic adjustment policies.

Mr. Beith: Does that priority mean raiding the budget for Asian countries, or will the Minister find new money for this purpose? Does the right lion. Gentleman recognise that the lesson of the United Nations Special Session on Africa is that there is a readiness to make the economic and structural reforms to which he refers, but that that effort will fail if there is not financial backing from the West, particularly in relieving the debt problem?.

Mr. Raison: It is important that Asian countries should receive substantial aid, as they do at present. We must ensure that we make the best use of our resources, and we are certainly looking for good ways of spending development money in Africa. The Africans themselves, at the end of the United Nations Special Session, said that they were satisfied with what had happened at that conference. It was successful both in terms of the Africans' stance of a commitment to policy reform and the donor response.

Mr. Jessel: Can my right hon. Friend assure me that. the amount of publicity rightly given to the needs of Africa will not mean that we ignore the needs of the Indian subcontinent, which may be just as great?

Mr. Raison: I am happy to give my hon. Friend that assurance.

Tropical Deforestation

Mr. Tony Lloyd: asked the Secretary of State for Foreign and Commonwealth Affairs what recent representations he has received on the issue of tropical deforestation.

Mr. Raison: Several hon. Members have written to me or tabled questions in the House. We have also received representations from a number of individuals and organisations, including Friends of the Earth and the International Institute for Environment and Development.

Mr. Lloyd: Given the widespread international concern about deforestation of tropical forests, what is the Government's attitude to giving practical help, and what help are they giving to nations, such as Indonesia, 'which depend upon the cash generated from the sale of such timbers? What substitution are the British Government prepared to allow to compensate for that factor?

Mr. Raison: We are ready to give practical help to those countries that ask us to do so. For example, we are giving help in valuable ways to Ghana, Sudan, India, Somalia and other countries.

Mr. Cecil Franks: On a point of order, Mr. Speaker.

Mr. Speaker: Order. Does this arise out of questions?

Mr. Franks: No.

Mr. Speaker: Then I shall take it at the usual time, after the statement.

Invalid Care Allowance

The Secretary of State for Social Services (Mr. Norman Fowler): With permission, Mr. Speaker, I should like to make a statement about invalid care allowance.
Invalid care allowance is intended to help people who care for severely disabled people at home. It is a noncontributory benefit and depends on the claimant caring for the disabled person for at least 35 hours a week. It was introduced by the then Labour Government in 1976 for men and single women who had given up their sole means of' livelihood to look after a severely disabled relative, but the legislation specifically excluded married women from benefit.
Since taking office, this Government have extended invalid care allowance to those caring for non-relatives and have also increased the earnings limit. Clearly there has also been pressure to extend invalid care allowance to married women. A case concerning their exclusion is now before the European Court of Justice and a debate is expected very shortly in another place. The Government have therefore reviewed the exclusion and have decided that, irrespective of the European Court decision, the allowance should be extended to married women on the same terms as married men and single persons. Accordingly, the Government will very shortly introduce an amendment to the Social Security Bill to achieve this.
The extension of invalid care allowance to married women will mean a very substantial expansion in the scope of the scheme. At present there are fewer than 11,000 beneficiaries and the cost of the allowance is £13 million. We expect up to 70,000 married women to claim the allowance, at an additional net cost of around £55 million in a full year.
The extension of the invalid care allowance to married women represents a very large improvement in the provision that we are making for disabled people in the community. It will recognise the vital role that married women play in looking after disabled people. I hope that the change will be welcomed on both sides of the House.

Mr. Michael Meacher: Is the Secretary of State aware that this extension of the invalid care allowance to married women is undoubtedly right and will be wholly welcomed by women's organisations and the 70,000 married women who will benefit? Is he also aware that carers are often persons who have given up jobs to look after severely disabled relatives or friends? In that light, the payment of £23 a week invalid care allowance to married women carers, to bring them on a par with men and single women, is the minimum that they have a right to expect, when the alternative of residential or nursing care by the state would cost at least £170 a week. In other words, carers save the state eight times as much as they are given by the state. Is he aware that this is a complete vindication of the case that was fought right up to the European Court of Justice by Mrs. Drake, and that it is only tragic that this decision has been left to the last possible moment by the Government and that it was not made before that case started on 20 December 1984?
More specifically, will the Secretary of State clarify whether back payments will be made to all married women carers who have been denied invalid care allowance in the last 18 months, which the European Court will almost

certainly rule tomorrow has been denied illegally? Is he aware that proceedings are already in hand to take the Government to court again if this entitlement is still denied?
Is the Secretary of State aware that while he is now giving to carers with one hand, he is taking away from carers with the other? Is he aware that carers are already disadvantaged by the current Social Security Bill, in two important ways: first, that they will no longer be able to qualify for the higher long-term rate of supplementary benefit after one year; and., secondly, that, of all client groups, they are singled out almost uniquely by the absence of any premium for them in that Bill? Is the Secretary of State aware, too, that support services, especially respite care, are every bit as important to carers as financial support, when it is known that two-thirds of them are in poor physical or mental health at any one time and that nearly seven in 10 suffer physical injury as a result of their caring duties?
Now that the Government have been dragged kicking and screaming through the courts to reach a decision which the Labour party made in 1983, will the Government face their responsibilities and provide the second half of what carers need—respite care and other support services — more graciously and more promptly than they conceded the first hall'?

Mr. Fowler: I am grateful at any rate for the hon. Gentleman's first words, when he said that the Government were entirely right to make this decision, but the further he continued with it the worse I thought his contribution became. If the Opposition feel so deeply on this issue, why was it that the last Labour Government specifically excluded married women from the legislation that they introduced? Married women were specifically excluded from the Social Security Benefits Act 1975, and it is that exclusion by the last Labour Government that is before the European Court at the moment. The Government will have to introduce primary legislation to put that right, and that is what we intend to do.
The question of the payment of arrears will need to be decided in the light of the European Court's judgment. Obviously we shall meet any legal obligations, but what those obligations are will depend upon that judgment. The European Court's judgment is thought to be imminent, and the Government will need a few days to consider it, but I shall make clear the position on arrears as speedily as possible. Of course I understand and support the extension of support services for the disabled.
As for the Government's record concerning the disabled, the fact of the Matter is that the Government have doubled the mobility allowance; they have removed the invalidity trap; and they have taken a whole range of measures which have improved the position of disabled people in this country. The Government are therefore entirely content to stand on their record.

Sir David Price: As one who has campaigned for years for the extension of the invalid care allowance to married women, I congratulate my right hon. Friend and thank him and the Government, and I extend my thanks to that least thanked of all Departments, the Treasury. Through my right hon. Friend, may I put it to the Treasury that it has set an example today from which I hope it has learnt that by looking not for narrow accounting but for total national cost benefit it may do a


great deal more to help the carers in the future and that it may earn for itself, as well as for my right hon. Friend some Brownie points?

Mr. Fowler: I shall pass on my hon. Friend's thanks to my right hon. Friend the Chancellor of the Exchequer. Of course, the whole Government stand by this policy. I am grateful for what my hon. Friend said, but in particular I am grateful for what he has done over the years. I recognise the campaigning that he has carried out on this issue.

Mr. Michael Meadowcroft: I, too, welcome the change in the legislation that is proposed by the Secretary of State in his statement today, which rectifies a piece of sexist legislation of the previous Labour Government. I also congratulate Mrs. Drake on her perseverance in persuading the Government to change this particular piece of legislation. Does this mean that everybody who cares for a severely disabled person at home will receive the invalidity care allowance? Will the Secretary of State look through other social security benefits which might also be thought to be sex discriminatory and rectify those before other people have to go to the European Court to do so?

Mr. Fowler: We shall obviously make entirely clear, not only in the publicity that we provide but by writing to as many people as we conceivably can in receipt of attendance allowance, the precise qualifications for invalid care allowance. Broadly speaking, as the hon. Gentleman knows, it goes to the carer on the basis that the disabled person should be in receipt of attendance allowance—that is, caring for the most severely disabled person—and the person caring should do so for 35 hours or more a week. It is intended as an income replacement and, broadly speaking, will not go to people over retirement age.

Mr. Fred Silvester: Will my right hon. Friend not be put off by the rather miserable and mean-minded Jonah the hon. Member for Oldham, West (Mr. Meacher), who led for the Opposition on this matter, and accept that although many of us will still have a "shopping list" on behalf of the disabled, we are grateful to him for taking this action so speedily and effectively?

Mr. Fowler: I am grateful to my hon. Friend. The public will make up their mind on the basis of what the Government have done, how we have acted and the extra resources that will be made available and compare that with what I took to be even more new promises, which are worth about as much as the old promises, of the hon. Member for Oldham, West (Mr. Meacher).

Mr. Frank Field: I thank the Secretary of State for his statement. Would it be fair to say that this afternoon's statement breathes new life into Dr. Johnson's phrase that to be hanged in the morning concentrates the mind wonderfully? May I offer the right hon. Gentleman the opportunity to congratulate Mrs. Drake and the Child Poverty Action Group, whose campaign has strengthened his hand against the Treasury? Will he confirm that this is new money from the Treasury and that he will not have to make savings from his existing budget, and can he tell married women the week in which they will pick up the money for the first time?

Mr. Fowler: I am certainly talking about additional resources. I must again point out to the hon. Gentleman that we shall have to introduce primary legislation because the Social Security Act 1975 specifically excludes married women and there is no way round that. The hon. Gentleman is typically fair, and I see from his response that he recognises the truth of what I am saying. Claims should be made from now onwards. We shall issue new leaflets and write to all those in receipt of attendance allowance. The new rules will start when the Bill receives Royal Assent.

Mr. Robert McCrindle: Is not the rather sour attitude of the Opposition a case of the fox being well and truly shot? Reverting to the point made by my hon. Friend the Member for Eastleigh (Sir D. Price), will my right hon. Friend give me an assurance that, in having gained the co-operation of the Treasury in implementing this welcome change, he will not consider that it in any way diminishes the continuing need to press for other desirable improvements in the social security system?

Mr. Fowler: Yes, I agree with both my hon. Friend's points. The response, particularly from the hon. Member for Oldham, West was grudging. The hon. Gentleman would be opposed to motherhood if he thought that it had been introduced by a Conservative Government. We shall continue to develop the social security system as we are doing.

Mr. Max Madden: Can the Secretary of State understand that most people recognise that the statement has been motivated, not by any generosity on the Government's behalf, but because they face the possibility of a humiliating finding of the European Court that their previous attitude discriminated against women? Will he give some figure for the amount that married women have been saving the state by caring for severely disabled people, and also some clearer details than he has done so far about what expense his Department will undertake to ensure that the benefit is widely publicised? Will he again give some estimate of the number of women who will benefit from the statement that he has made today?

Mr. Fowler: I thought that I had given those figures. We expect there to be about 70,000 new beneficiaries. There will be about 50,000 net gainers because of the interacting effect of the entitlement to dependency addition. The Government cannot really do more about publicity than I have promised. We shall write to everyone in receipt of attendance allowance, as that seems to be an eminently sensible course to take. On the general position, I hear what the hon. Gentleman says, but I remind him that we are putting right the Labour Government's legislation.

Mrs. Virginia Bottomley: I join in congratulating my right hon. Friend on his decision. I have for some time urged the Government to make the right decision about married women and the invalid care allowance. Four out of five carers are women, and there are often more women looking after dependent elderly relatives and disabled people than there are looking after children. Will my right hon. Friend renew his efforts to look at the needs of carers in the broadest sense? They


require emotional and practical support, and not just financial help, and the best way of providing that is often in partnership with the voluntary sector.

Mr. Fowler: I have great sympathy with what my hon. Friend has said. As she may know, the Government have been developing policy in this area and seeking to introduce further proposals. I hope that in the not too distant future I shall have something to say about the further development of that policy.

Mr. Robert Maclennan: Does the Secretary of State realise that the public have become increasingly aware that their best defences against sexual discrimination are the European Court of Justice and the European Court of Human Rights? Is he satisfied that the Government's proposals on tax credits, which are currently being considered, will not fall foul of similar anti-discriminatory European legislation? Should the proposals not be withdrawn?

Mr. Fowler: The hon. Gentleman has taken us a little away from the question of invalid care allowance. The Government have taken a whole range of actions to remove sex discrimination from our social security legislation. Since 1983 men and women have been able to claim income-related benefits on the same terms. We have changed the household duties test, and there is equal treatment over claims for dependency benefits. In other words, quite apart from decisions by the European Court, we have taken a whole series of steps that have achieved greater equality.

Mr. Andrew Rowe: Is my hon. Friend aware that his announcement today will give particular pleasure to my contituency, where the Association of Carers resides? Would he care to pay tribute to the association for giving every hon. Member a great deal of information about carers, even though some of it ended up in a rather vituperative statement from the hon. Member for Oldham, West (Mr. Meacher)? That information has been useful to us all.

Mr. Fowler: I certainly join my hon. Friend in paying that tribute. I think that there is broad support in all parts of the House for this step.

Mr. Rober N. Wareing: Although I welcome the Government's decision, belated though it may be, did not the Minister for Social Security say last April that the cost of this extension would be about £100 million? We are now told that the figure is £55 million. 1las the discrepancy occurred because in between times, while by-elections have been held, the Government have changed their mind, have decided that they can make the extension, and have accordingly lowered their figures? Alternatively, are some of the calculations inexact? Will the right hon. Gentleman give an assurance that the present level of benefit will be maintained, despite any inflation during the next two years, before the Government's demise?

Mr. Fowler: That is a matter to be dealt with in the uprating statement. I pay tribute to the efforts by the Minister responsible for the disabled. He has always made it clear that the Government accept the aim in principle but that there are problems of both resources and priorities.
The figure is an estimate. We think that £55 million in a full year is the net cost. The gross cost is about £80 million, but the extension of ICA to married women means that some entitlement to dependency additions will cease. That is the difference between the gross and the net costs. Another factor that must be taken into account is that new estimates have been made following the European case involving Mrs. Drake, and we can now base our estimates on actual applications.

Mr. David Sumberg: I join in congratulating my right hon. Friend on his statement, which will be welcomed by my constituents. Does he agree that the churlish attitude on the Opposition Benches is strongly influenced by the fact that, despite protestations about sex equality, women's committees and women's rights, it has taken a Tory Government to move in this direction?

Mr. Fowler: My hon. Friend is right. We have taken the action. The hon. Member for Oldham, West only talks extravagantly about it.

Mr. Michael Stern: Does my right hon. Friend agree that the purpose of social security benefit is to meet need, rather than desire? Is he sure, given that £55 million has been added to his budget today, that the disabled could not be more effectively helped in other ways, for example, by the extension of mobility allowance for certain groups?

Mr. Fowler: Conflicting and competing priorities will always exist. However, ICA enables us to recognise the position of those who have given up the opportunity to work so that they can care for a disabled person. Such help is entirely in line with what most people want.

Mr. John Browne: Does my right hon. Friend accept that his statement rectifying Socialist legislation will be widely welcomed, not only by married women, but by many others who genuinely believe in boosting community care rather than relying on official Government sources?

Mr. Fowler: Yes. My statement should be seen in the context of community care policy, and not as an individual policy.

Mr. Tony Marlow: I congratulate my right hon. Friend on his decision, but can he explain to the British public how an institution of the Common Market, which we joined at the time of the referendum on the basis of free trading with Europe, can make a judgment on how much social payment we should make, to whom, how and why? Where will it end? Will my right hon. Friend ask the European Court, since it seems to have power over our social payments, whether it would be proper to allocate family credit on the basis of the sex of the recipient?

Mr. Fowler: We are bound by the directive on equal rights, and the case has gone to the European Court under that directive. I have made it clear in my statement that irrespective of what the European Court decides we intend to go ahead with this policy.

Bedford Commercial Vehicles

Mr. David Madel: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the announcement by Bedford commercial vehicles that it intends to reduce its work force of 7,200 in Dunstable and Luton by 1,700 by the end of the year.
There are three reasons why I think that the matter should take precedence over the announced business. First, the announcement has serious employment repercussions for the area. Secondly, urgent action will be needed to provide extra opportunities for retraining. The House should now consider that. Thirdly, the House could resume its debate on the future of the commercial vehicle industry and the extent to which continuing American investment is essential. When sharp local increases in unemployment occur, the House should adjust its programme so that the matter can be properly debated.

Mr. Speaker: The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
the redundancies announced by Bedford commercial vehicles today.
I listened with great care to what the hon. Gentleman said. As he knows, the only decision that I have to take is whether to give this matter precedence over the business set down for today or tomorrow. I regret that I cannot find that the matter that he has raised is appropriate for discussion under Standing Order No. 10 and I cannot. therefore, submit his application to the House. I hope that he will find other appropriate ways of bringing the issue before the House.
Later—

Mr. Alan Williams: I do not challenge your ruling Mr. Speaker, but you will appreciate how crippling a blow the loss of 1,700 jobs will be to the area represented by the hon. Member for Bedfordshire, South-West (Mr. Madel) as a result of the failure of General Motors to invest as it should have done in this country. As we cannot have a debate tomorrow, I wonder whether the. Leader of the House, who is in his place, can be asked, through you, if he will ensure that a statement is made on this matter tomorrow afternoon.

The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I take note of that request.

Sheepmeat (Caesium Levels)

Mr. D. E. Thomas: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the restrictions on the movement and slaughter of sheep, made by the Secretary of State for Wales and the Minister of Agriculture, Fisheries and Food, with effect in north Wales and Cumbria,"—
known in Welsh as Yr Hen Ogledd—
and the environmental and economic implications of this action.
I raise this issue because on Friday afternoon the Minister of Agriculture, Fisheries and Food made the most important statement on agriculture that has been made in this place during the period that I have been a Member of it. The statement has the most serious implications of an environmental nature, including radioactive pollution. in north Wales and Cumbria. It has serious economic implications for 4,000 farmers in north Wales and about 1,000 in Cumbria.
The initial statement was made on Friday, when most of the hon. Members representing the affected constituencies, including myself — perhaps I represent the constituency which is the most affected—were in their constituencies. I was grateful for the opportunity to meet Welsh Office civil servants on Friday to discuss the matter, but that is no substitute for a debate in the House. I request urgently that my application be granted.

Mr. Speaker: The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
the restrictions on the movement and slaughter of sheep, made by the Secretary of State for Wales and the Minister of Agriculture, Fisheries and Food, with effect in north Wales and Cumbria, and the environmental and economic implications of this action.
I regret that I must give the hon. Gentleman the same answer as I gave to the hon. Member for Bedfordshire, South-West (Mr. Madel). I do not consider that it is a matter that is appropriate for discussion under Standing Order No. 10 and I cannot, therefore, submit his application to the House.
Later—

Mr. Brynmor John: On a point of order, Mr. Speaker. The Minister of Agriculture, Fisheries and Food made a statement in the House on Friday about caesium levels in young lambs. As a result, the House was left with the clear impression that the high levels were a recent development. However, in the weekend press, and again in today's press, there were ministerial concessions that Ministers had known of similar levels for about a month. As the House was left with a false impression, Mr. Speaker, I urge you to use your good offices to secure the debate for which I asked last Friday, or, at the very least, an oral statement setting the record straight. Any proposal to extend intensive monitoring to Scotland and Northern Ireland, which has been rumoured, should be announced orally to the House, preferably in a more full and frank manner.

Mr. D. E. Thomas: Further to that point of order, Mr. Speaker. How is it possible for us, as Members


representing constituents affected in this way, to be informed of such statements? It is intolerable that major statements, with substantial economic effects for our constituents, should be made on Fridays. It is also intolerable that the Minister who has responsibility for agricultural policy in Wales has not yet spoken in the House on the matter, although he speaks on the subject regularly on television.

Mr. Robert Maclennan: Further to that point of order, Mr. Speaker. I have put down a question for written answer by the Minister of Agriculture, Fisheries and Food which should cover the point made by the hon. Member for Pontypridd (Mr. John). May I say to the Leader of the House, through you, Mr. Speaker, that it would not be regarded by me as any discourtesy, but indeed entirely proper, if the Minister responsible made an oral statement.

Mr. Speaker: Friday is a full working parliamentary day. There is nothing wrong with a statement being made on a Friday. On the question of a debate, I ruled on the application under Standing Order No. 10 that it did not meet all the criteria laid down by the Standing Order. There are other ways that the hon. Member can use to seek a debate on such an important matter.

Several Hon. Members: rose—

Mr. Speaker: Order. I shall take first the hon. Member for Barrow and Furness (Mr. Franks), who has notified me that he wishes to raise a point of order.

Deputy Chief Constable Stalker

Mr. Cecil Franks: On a point of order, Mr. Speaker. Earlier today I drew to your attention press comments which appeared in the national press yesterday and today concerning certain allegations against the deputy chief constable of Manchester. In view of the increasingly apparent breach of the rule of law, and breach of the principles of natural justice, together with the increasingly bizarre involvement of right hon. and hon. Members, surely it is incumbent upon my right hon. Friend the Home Secretary to make an authoritative statement this afternoon.

Mr. Speaker: That is not really a matter for me. I read the speculation in the newspapers, and this is a matter which the hon. Gentleman must pursue with the Home Secretary.

Mr. Franks: rose—

Mr. Speaker: Order. I do not think that I can do anything about it.

Mr. Franks: Further to that point of order, Mr. Speaker. May I bring to your attention one urgent matter? I understand from the Press Association that officers from the West Yorkshire police are in the House at this moment interviewing other Members of Parliament. Surely it is incumbent upon my right hon. Friend the Home Secretary to bring the matter to a conclusion, one way or the other?

Mr. Speaker: That may well be so, but it is not a matter for mc. The hon. Gentleman must pursue the issue with the Home Secretary, not with me.

Early-day Motion

Mr. Clement Freud: On a different point of order, Mr. Speaker. This morning, as a result of the happenings at the Azteca stadium in Mexico last night, I sought to table an early-day motion to the effect that the House was sick as a parrot. That motion was refused by the Clerk, although he intimated that he would have accepted a motion that the House was over the moon. I am concerned that—

Mr. Speaker: Order. What is the point of order for me?

Mr. Freud: I am concerned that, as a nation, we thrive on defeat. We boast of the charge of the Light Brigade, the Somme and Dunkirk. Why is it that we cannot reflect such sentiments through the Order Paper when we do so in history?

Mr. Speaker: Order. I judge, from what the hon. Member has said, that he sought to put down a motion which the Table Office refused to accept. I shall look into the matter.

STATUTORY INSTRUMENTS, &c.

Ordered,
That the draft Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) Order 1986 be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the draft Weights and Measures Act 1963 (Miscellaneous Foods) (Amendment) Order 1986 be referred to a Standing Committee on Statutory Instruments, &amp;c.—[Mr. Sainsbury.]

Opposition Day

[11TH ALLOTTED DAY] [SECOND PART]

Water Authorities (Privatisation)

Mr. Speaker: I have selected the amendment in the name of the Prime Minister.

Mr. Simon Hughes: I beg to move,
That this House rejects the Government's proposals for privatisation of the water authorities, which will undermine public accountability without improving efficiency or benefiting the consumer, and which will have serious consequences for capital investment, environmental protection, water resource planning, land drainage, fisheries management and recreational facilities.
This is the House's first opportunity to debate the plans that the Government announced earlier this year. The Government propose to introduce legislation in the forthcoming Session of Parliament to privatise the water authorities. Although nothing was said in the Conservative party manifesto of 1983, it is now apparent that water is to be privatised. Water is the latest in the line of national assets that the Government propose to sell. It will follow gas, the airports, the proposal for British Airways, and many others.
However, there is a fundamental difference. To privatise what is, for most of Britain, the most fundamental community asset is the most fundamental privatisation of all. In my view, the country believes that there are fundamental objections of principle which make the proposal unacceptable. I believe that today will mark the beginning of an increasingly Well-argued, vociferous and, I hope ultimately, convincing campaign that will dissuade the Government from proceeding down such a political course.
In February this year, the Secretary of State for the Environment made a statement on this subject. It was only a year after his former colleague, the hon. Member for Eastbourne (Mr. Gow), announced on 7 February 1985 that the Government would examine the prospects for privatisation in the water industry. A discussion paper followed two months later. Earlier this year, the Secretary of State produced a White Paper and announced that the Government would legislate in the autumn. The Secretary of State, in some of his answers and statements in that announcement, gave a clue to the flaw in the logic of the Government. He said:
In the last six years we have made the water authorities fit and ready to join the private sector; and, as reported to the Public Accounts Committee, the quality of water services has been improving in almost all regions."—[Official Report, 5 February 1986; Vol. 91, c. 288.]
What has happened of late—it is similar to what has happened with the British Airways proposal—is that the Government have, on the one hand, argued how wonderful the water industry is becoming, how suitable and appropriate it is for its job, how competently it is performing and how increasingly effectively it is using its investment, and, on the other hand, said that it is no longer appropriate that it should remain in the public sector.
Although there may be arguments that it is not necessarily appropriate for a particular industry or one

area of national supply to be in the public or private sector, we start from a position whereby, for about three quarters of the British public, water is a public service. For the rest, water is supplied by private companies. About a quarter of the people of England and Wales receive water from the private sector. There has never been any suggestion by my right hon. and hon. Friends that those companies should be put into the public sector because they have been pleasing their customers, because they are small and because they are responding effectively to local community needs.
Water is not a national asset; rather it is a community asset. It is principally because it has been seen to be a community asset that the management of the water industry has gone the way it has in the past 100 years. About 100 years ago, there were moves in the House to ensure, for the first time, that water services be provided by a metropolitan water board. The argument at that time was whether it was appropriate that the water industry should be a nationalised industry or a series of municipal undertakings which would be democratically controlled by ratepayers and local residents. We agreed the latter.
Over the decades that followed, a patchwork of local water boards and local undertakings was established throughout the country. They served the needs of people up and down the land. It was not until 1973 that there was a fundamental reform, but it was not nationalisation. In 1973, a structural reform created 10 water authorities, taking control out of local government hands and making them less acceptable because they were less accountable, although the principle of organising water on the basis of river basins was a logical progression.
Our fundamental criticism of the Government's proposal is that they intend to take water out of the area of public accountability and, in doing so, risk prejudicing the service to the consumer in many all-important respects.

Mr. Ian Gow: Does the hon. Gentleman believe that the private water companies are
"out of the area of public accountability",
to use his own words?

Mr. Hughes: The private water companies are accountable because they are responsible within their regions to the water authorities. The Government propose —the hon. Gentleman knows this because originally he was the advocate of the privatisation proposal — that there will be 10 private monopolies. Those companies will give neither the benefit of competition, which the hon. Member for Eastbourne and his right hon. and hon. Friends extol, nor the benefit of accountability to the public because accountability will only be to the shareholders of the private companies.
Another of our fundamental objections is that all of the Government's arguments are clearly flawed, even by their own logic. Water, inevitably, is a universal need, for supply and for removal. It is vitally concerned with health and hygiene. It is of pre-eminent importance environmentally, and what it does environmentally concerns industry, agriculture, food supply, urban and rural living and leisure. It is unacceptable that the Government should seek to dissociate themselves from a close interest in these matters because they affect consumer safety, protection of the consumer from exploitation, adequacy and cost of services, river water quality, flood control — although there is an exception — and the use of chemicals in agriculture, amongst many other things.
I hope that the debate will centre on the fundamentals of the Government's proposition and that we will debate fundamental questions and agree on fundamental and important answers. There are four short questions. First, is there any clear and urgent need to change ownership of the industry? The answer is no. Secondly, is ownership of the industry relevant to the efficiency of its services? The answer is not necessarily. Thirdly, would a change of ownership cause major dislocation? The answer is possibly not major but certainly some. Fourthly, would privatisation lead to greater competition and, according to the Government's argument, greater benefit to the consumer? The answer is certainly not, because water supply and sewage disposal constitute a national monopoly throughout Britain.
The United Kingdom is unique in the developed world in that 99 per cent. of our population are connected to a wholesome, piped water supply and 94 per cent. are connected to the public sewerage system. Compare that with elsewhere in Europe and one can see the great advantage to be gained from retaining substantial public control over this asset. For example, just over the Channel in Belgium only 55 per cent. of the public are connected to the sewerage system, in Italy it is 56 per cent., and in Greece about 25 per cent. In much of Europe the percentage is substantially below our percentage.
For most people, water is the most substantial asset that they use each day. The most recent figures I have show that an average of 340 litres of water a day are consumed by each Briton.
The motivation for the Government lies in the fact that there is money to be made from the sale of the water authorities, when, having sold off as much else as they can, they find that they are running out of money —arguably, to be derived from selling an asset that is not theirs to sell.
When water was taken over in 1973 from the many smaller undertakings, it was taken not into national ownership but into a series of water authorities. Many other assets are properly defined as national industries, but there is an argument, which many people understand, that the Government, having exhausted what they can justify selling out of nationalised control, are turning to assets that are not even properly theirs. The people know why they do that. As recently as last Saturday in Porthcawl, the Prime Minister said that her prime interest was not in services, but in reducing the amount of taxation that British people should have to pay at a basic rate. That is flying in the face not only of opinion polls, but of the majority public view that, under the Conservative Government. the British people are losing good services —whether in the Health Service, the education service or the transport service. The view is that the public are fed up with interference in local accountability. The Prime Minister is not listening even now. I have no doubt that she will rejoice in having at her hand in her new asset-stripping exercise the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley), who has been so assiduous a devotee of the Government's magic of the market place economic policy.
In 1973, when the authorities took over the existing assets, no compensation was paid. That shows that it was not a nationalisation measure. Under the Labour Government, a national water authority was proposed, but the idea got no further than that. The Government have seized on the idea of taking away our present

structure, despite all that they have said about safeguards, because they realise that the water industry's assets are worth £27 billion. There is a total work force of 52,000, annual turnover of about £2·6 billion and capital investment of over £900 million. That is the size of the asset that the Government have decided they would like to sell.

Mr. Cyril Smith: My hon. Friend has referred to the water authorities' annual capital programme. Is he aware that the North-West water authority has outstanding loans of more than £900 million which add £125 million a year to the bill that consumers must pay in interest charges? While my right hon. Friend is addressing the motley gathering on the Government Front Bench, will he suggest that they write off the water authorities' debts to Government Departments before any water privatisation takes place, if it does?

Mr. Hughes: My hon Friend is right. I have been passed a copy of a letter expressing just that concern on behalf of the North-West water authority. I am having enough difficulty trying to persuade the Government to be generous enough to pay a few thousand pounds to the relatives of those who were injured or who died at the Abbeystead pumping station disaster—they appear to be unwilling to give that money, despite the compassionate reasons for doing so—let alone to give any undertaking about writing off those substantial debts.

Mr. Peter Hardy: The hon. Gentleman has referred to the asset value of the water industry. Does he realise that the Government pay no heed to the asset value of what they have privatised? The asset value of the British Gas Corporation is about £18 billion, and the Government are likely to sell it for little more than a third of that amount.

Mr. Hughes: The hon. Gentleman is right. He may have seen an article in the Financial Times, soon after this proposal was announced, which, region by region, went through how much the assets were likely to raise.
There are flagships. The Thames water authority in my region in London is a flagship which Mr. Roy Watts wants to sell off. There are other large authorities, of which the North-West is one, that clearly will not be easy to sell off. There are other, small water authorities—for example, the Southern water authority—which probably are not at all ready to be sold off. Therefore, the Government's argument that they have fatted the calf ready for slaughter does not on analysis apply throughout the land, in spite of the fact that investment will have increased from £340 million in 1981–82, in sewerage, for example, to about £525 million in 1986–87—an increase of 38 per cent. in real terms.
There are now 10 modern businesses running the water industry in Britain. In their own White Paper the Government say that the finances have been strengthened and that a great deal of worthwhile investment has been carried out. Efficiency and performance have been substantially improved and now the Government are going to privatise. What is the danger? My hon. Friend the Member for Rochdale (Mr. Smith) made the point. The danger is that what will be of greatest interest to the new private companies will be raising money from the consumer where they can raise it. However, there is not much money in sewerage or in environmental protection.


They are not very profit-producing. There is not much money in enhancing recreation without massively increasing the costs to the people who will use it. There is not much money in making sure that the amenities, landscapes and planning are acceptable to the local community or in consulting the public about what is being done. None of those things will produce a great amount of profit.
All the things that are needed will probably disadvantage the paying consumer, unless the Government realise the flaw in the financial argument, in which case they will do something else. They will then make it necessary for the water authorities to put up the prices to the consumer this year, next year and the year after, as they did in past years when the water authorities did not want prices to be increased. The Government will say that the price has to be increased to the consumer in order to have enough money in the kitty to survive in private hands as a financially viable proposition. That argument will not be to the advantage of the consumers either, and the consumers are the most important people to be affected by it. One need cite only one recent example to show that is true. If one looks at the average increase in cost since British Telecom was privatised there is very little net increase. However, if one looks at the net increase to the private telecommunications user, it is 8 per cent. up straight away. Prices have been held down for some of the people who make phone calls abroad on business, but for people using telephones locally privately prices have gone up.

The Minister for Housing, Urban Affairs and Construction (Mr. John Patten): Is the hon. Gentleman aware that tariffs are already balanced in the British water industry and that the rebalancing of tariffs necessary for British Telecom cannot and would not apply for that reason?

Mr. Hughes: The argument about British Telecom is that the public have seen tariffs go up with privatisation. The most obvious risk to most of the public from privatisation is that they will have no control. If the water companies go to the director general, who the Government propose to appoint, and say they want to put up prices by so much and the Government are tempted to say that it is too much, they will say, "In that case, dear Government, the services will go down."

Mr. Robin Squire: rose—

Mr. Hughes: This is a short debate and many hon. Members wish to contribute.
Many people have already expressed concern: farmers, consumers, local government officers, representatives of environmental bodies and recreational interests. They see no prospect of the proposals to privatise water protecting either the service or the environment. In their manifesto of 1983 the Government ended the section on nationalisation by saying:
merely to replace state monopolies by private ones would be to waste an historic opportunity. So we will take steps to ensure that these new firms do not exploit their powerful positions to the detriment of consumers or their competitors.
I wonder whether the Government had thought about the water industry. If the Government go ahead with what they intend as the last big asset sale before the general

election, they may discover that they are dealing with the service that the country and individuals are most reluctant to hand over away from local and Government control. The Government will be making a mistake. They have five months in which to reconsider. If they introduce a Bill in November, we will oppose every clause and every line. [Interruption.] We will oppose it because it is the most fundamentally damaging and risky proposal of the whole privatisation series. If the Government go ahead to privatise the water industry, it may well be the last proposal that they are empowered to make.

The Minister for Housing, Urban Affairs and Construction (Mr. John Patten): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
'welcomes the Government's proposals for the privatisation of the water authorities, which will benefit customers, strengthen safeguards for the water environment, encourage enterprise, improve the efficiency of industry, reduce the public sector and extend share-ownership.'.
I listened with great care to the hon. Member for Southwark and Bermondsey (Mr. Hughes). I came to the House this afternoon thinking that I was going to listen with equal care to his colleague the hon. Member for Woolwich (Mr. Cartwright), but alas he has been struck down by some unfortunate illness and could not introduce the debate. I listened carefully to the hon. Member for Woolwich during the debates on the Housing and Planning Bill and endeavoured, by listening carefully, to improve what we are doing. That is why I listened carefully to the hon. Member for Southwark and Bermondsey in his short speech this afternoon.
I think that it is incumbent upon us in this place to listen carefully, especially when people feel that they have fundamental fears about something the Government are setting out to do. When people raise fundamental fears, I take the matter very seriously and do not just bat it aside as some kind of ideological knee-jerk reaction from whichever Bench it comes. Therefore, I welcome the opportunity of this brief debate during which, as much as possible, we can talk about principles, as the hon. Member for Southwark and Bermondsey has done. We shall get many other opportunities to talk about the details.
I would be more moved by what the hon. Gentleman had to say about his fears of water privatisation if we did not have so many examples around the Western world of where water and sewerage services are supplied adequately, with good standards of public consumer protection. We have that not very far away across the Channel in France, where franchise companies supply water and other services very successfully. I know that recommending examples from abroad will not necessarily gain the consent of everyone in the Chamber. Therefore, perhaps I can suggest that we do not have to go very far from the constituency of the hon. Member for Berwick-upon-Tweed (Mr. Beith), who will reply to the debate on behalf of the Liberal party.
The hon. Gentleman and many of his constituents occasionally drink private water, if they let water cross their lips. It is excellent water, supplied by the Newcastle and Gateshead water company. I believe that the hon. Member for Houghton and Washington (Mr. Boyes) also drinks this private substance and does not come to any harm. Therefore, I say to the hon. Member for Southwark


and Bermondsey, "Do not let us erect the whole argument on the premise that public provision is good and private provision is bad". That would be a ludicrous argument to advance to this or any other place.

Mr. Allan Roberts: rose—

Mr. Patten: I would give way to the hon. Gentleman much more willingly if he was not wearing that offensive red striped jersey. If at a later stage he chooses to take it off, I shall give way. Until then, I fear that I must restrain myself.

Mr. Roberts: rose—

Mr. Patten: I give in.

Mr. Roberts: As the Minister found my jumper so attractive during the debates on the Housing and Planning Bill, I thought it might have induced him to give way today. As the hon. Gentleman is talking about private water supplies, has he heard the rumour that Perrier is hoping to buy into the North-West water authority when it is privatised, to introduce a new bottled water, Perrier Nouveau, which will be sold in France? It will be bottling Lake District water, because it is some of the best water available. It is better than the water Perrier sells in this country. Nowhere in the White Paper do the Government say that they will prevent foreign capital buying into our water authorities. Will the Minister prevent that?

Mr. Patten: I gave way to the hon. Gentleman when he began to divest himself of articles of clothing, for fear that he might go further. I know nothing of those rumours, and I shall look forward to learning more of the facts when they are forthcoming.

Mr. Roberts: What about foreign investment?

Mr. Patten: Foreign investment is welcome in this country, as our investment abroad is profitable for us. Foreign investment is always welcome in this country.

Mr. Nigel Spearing: rose—

Mr. Patten: I shall not give way, in the interests of others who want to speak. I shall try to look point by point at some of the issues raised by the hon. Member for Southwark and Bermondsey. There are a number of myths about water privatisation, and there is another side to the argument of almost all those myths.
I should like to ask the hon. Member for Southwark and Bermondsey, in his open-minded way, at least to consider the other side of the argument. One myth is that somehow privatisation will be had for customers. However, we think that customers will benefit very much from the increased efficiency that will result from private sector management. Also, and this is important, water services plcs will have access to funds on the private capital market. That means that each year, during the public expenditure survey discussions with the Treasury, no longer will water authorities have to compete with hospitals—

Dr. John Cunningham: rose—

Mr. Patten: —schools and other parts of the public sector for access to capital, which is greatly needed in those areas.

Mr. Robin Maxwell-Hyslop: Will my hon. Friend give way?

Mr. Patten: I must give way first to the hon. Member for Copeland (Dr. Cunningham), and then I shall give way to my hon. Friend. After that I had better make some headway with my speech.

Dr. Cunningham: If the Minister wants to make some headway, he would be far better advised to abandon bogus arguments of the sort that he has just advanced. It is completely unnecessary to sell off Britain's publicly owned water companies and the regional water authorities to allow them to raise investment outside the Government's control. That can be done by a simple policy decision of the Government.

Mr. Patten: The hon. Gentleman was on his feet asking me to give way before I had even finished my sentence, so it was hard of him to say that I was using bogus arguments before he had heard me finish my argument.
In answer to the hon. Gentleman's question, I say only that I cannot believe that any Labour Administration or Treasury team would allow unfettered access to outside capital markets by all bodies in the public sector without any control at all. I do not believe that that could possibly be the case. [Interruption. The hon. Gentleman muttered sotto voce. I can lip read. I think he said, "Wait and see."

Dr. Cunningham: I said, "BNOC."

Mr. Patten: I am sorry, I cannot lip read.

Mr. Maxwell-Hyslop: Will my hon. Friend explain why, except on the basis of a purely capricious and reversible decision, water, which the Government do not own, should be considered within the public sector, and British Leyland, which the Government do own, is not considered within the public sector — the public sector borrowing requirement? Is it not wholly capricious? With the stroke of a pen water can be removed, just as British Leyland was.

Mr. Patten: It may be capricious, but that is the fact of the present situation.
I believe that customer requirements will be met much more easily under a privatised regime. Customers will be able to enter directly into ownership and control of water services plcs by becoming shareholders. That will sort out who owns what. It is real ownership. Real power is being given to individuals, not the phoney idea of public ownership through nationalised industries, to which idea I think the hon. Member for: Southwark and Bermondsey does not subscribe.
Strong regulation is essential for any private sector utility. I should be the first to say that. However, just to say that one needs strong regulation is not in itself an argument against privatisation. That cannot be so. It is merely the means by which we can ensure that the benefits of privatisation are passed on to customers and shareholders alike. A Director General of Water Services will be appointed to ensure that the water services plcs are well regulated and do not abuse their monopoly position. The director general's task will be to ensure that customers as well as shareholders benefit from the improved performance of privatised authorities. He will do so by means of a licence. The licence will set limits on the amounts by which water services plcs are able to increase their charges at any one time and will set standards of services that they are obliged to meet.
I return to the matter to which I referred when the hon. Member for Southwark and Bermondsey let me intervene


in his speech. British Telecom is a one-off arrangement, as far as I can tell, based on the rebalancing of tariffs. Tariffs in the water industry are already balanced. There is already a statutory obligation on water authorities not to discriminate between one form of user and another. Therefore, the water services plcs will not he in the same position as British Telecom. The licence will be a tough discipline for the water services plcs. To keep within it, they will have to maximise their efficiency.
Let me deal with another myth, that water is somehow a free public good. Although it was not reflected in what the hon. Member for Southwark and Bermondsey said, it is in the back of many people's minds that somehow water comes out of the atmosphere and should be free. It is nothing of the sort. [Interruption.] I am afraid that, as I am suffering from a summer solstice sore throat, I am easy game for those who want to shout me down. I cannot make myself heard above all that. [Interruption.] It comes from the hydrological cycle.
We need the most elaborate and capital-intensive system to ensure that the storage, purification and distribution of water is up to the highest modern standards of health and convenience. The value added by that system is financially enormous and socially incalculable.

Mr. William O'Brien: What about the quality of water in Yorkshire?

Mr. Patten: I know that there are problems in Yorkshire. I have met the water authority to discuss them.
That system means that the water industry puts the highest demands on the latest techniques in engineering and biotechnology. These are very important techniques.

Mr. David Alton: Will the Minister allow himself to he drawn on the question of capital investment? He may have seen speculation in this morning's edition of The Guardian that because of the Government's privatisation scheme it may be necessary to move money that would have been used for cleaning up the Mersey estuary to clean beaches at Blackpool instead. I do not know whether that is true, but it would be difficult for the North-West water authority, with a capital investment programme of £200 million a year, to keep up with such investment should privatisation go ahead. How would the Minister deal with that?

Mr. Patten: The speculation to which the hon. Gentleman refers has no basis whatsoever. The words that were written were incorrect. There is no basis for them. There is no trade-off between the investment in beaches at Blackpool and the Mersey clean-up. The money dedicated to the Mersey clean-up is dedicated to that end. I have received a letter from the chairman of the North-West water authority, outlining his plans to increase investment within the forward capital planning of his water authority over the next five years, to deal with the problems at Blackpool. I am pleased that I had the opportunity to say that in answer to the hon. Gentleman's question.
Another myth to which we might usefully refer, and to which the hon. Member for Southwark and Bermondsey alluded only briefly, is that privatisation will somehow damage the water environment, as if, automatically, just because something is in private hands, the environment will be damaged, or even because there is no profit in it,

the environment will be damaged. Those are illogical arguments in themselves. No one could substantiate those arguments. After all, it was left to us to bring into force part II of the Control of Pollution Act, which had long been neglected by the Labour party when it was in government. It is this Government who have introduced public inquiries that control discharges. It is this Government who have opened up public registers. It is this Government who are extending protection to all our water areas, including beaches and coastal waters.
We outlined those new advances in the pale green-covered consultation paper on the water environment, which we published a couple of months ago. We are convinced that privatisation gives several new opportunities for improving the water environment, including tighter ministerial control over water quality.

Mr. Spearing: Will the Minister give way?

Mr. Patten: I shall not give way. I must proceed, as we have little time this afternoon.
The consultation paper on the environment clearly shows our commitment to improve the water environment. It reflects the most thorough review of the needs of the water environment for more than a decade, and that point has been widely recognised by the conservation and environmental bodies that responded to the study. No one has denied the thoroughness of the review that led to the publication of the paper.
I have been heartened by the welcome that some of the practical proposals have received from the bodies which we consulted and which responded to the consultation. The points which appear to have gained the approval of those who have responded so far are: first, the setting up of statutory water quality objectives for the first time—this has been widely welcomed—secondly, the creation of water protection zones for sensitive areas of the water environment; thirdly, the preparation of statutory codes of practice for conservation; fourthly—and this is most important and has considerable implications across the hoard in the environmental area—the establishment of a new Government inspectorate to monitor water services plcs, pollution control activities — this also has been widely welcomed—and, finally, the power to implement national and European Community environmental policies by regulation. These advances will ensure that environmental objectives are better defined, more vigorously pursued and, I believe, more effectively achieved than at present.

Mr. Spearing: Will the Minister give way?

Mr. Patten: I hope that the hon. Gentleman will forgive me for not giving way.
Water services pies will inherit all the statutory duties —and I stress this—which currently rest upon the water authorities. In the performance of their regulatory functions—discharge consents, abstraction licences and so on—they will have to act even-handedly. The powers of call-in by my right hon. Friend the Secretary of State, and the appellate powers to my right hon. Friend the Secretary of State, will continue. We will continue to have public registers and public access to information about discharges, and I am certain that the hon. Member for Southwark and Bermondsey and his colleagues will welcome that. We intend to improve that access in all circumstances. In addition, we have made it clear that we


intend water services plcs to maintain—as I made clear in the consultation paper on the environmental protection issues —the current level of subsidy from main charges to continue their vital but non-profit making environmental work.
We have published a league table for the first time, showing the amounts of money which the different water authorities are spending on environmental protection work as a baseline below which they will not be permitted to go in real terms. This will be built into the operating licence, together with the circumstances under which the water services plcs will have to proceed.
Another myth which is sometimes circulated is that there will be an adverse impact on employees through water privatisation. I do not think that that will be the case. Some 50,000 people work in the water authorities and they will directly benefit from the success of their new employers—the water services plcs.
It is established Government policy to offer shares on attractive terms to those who work in the industry. I shall say a word or two about that now, as I know that the 50,000 or more employees will be interested in the Government's plans. Only last week my right hon. Friend the Secretary of State for Energy announced the proposed arrangements for the British Gas Corporation. These followed earlier schemes for employees of British Telecom and a whole range of other recently privatised bodies. The details vary from case to case, and will no doubt he different again for water, but there are common threads which run through them all.
The first common thread is that there is an initial block of entirely free shares for each employee. The second is that there will be an extra free share—sometimes even more—for every share that the employee buys, up to a specified threshold. Often there is an additional discount on additional share purchases, up to a certain ceiling. We will seriously consider what the employees in the water authorities could and should expect. We must also consider what the consumer—those who currently pay their water bills through water rates—might expect. We are keen to see the genuine devolution of ownership to people living in the regions, and individuals living in the regions will find the opportunity of owning shares in their local water company extremely attractive.
Another myth, which was expressed strongly by the hon. Member for Southwark and Bermondsey, is that it is somehow wrong to attempt to privatise any service that is as vital as water. The argument appears to be that anything that is so vital to maintain human life as water must, QED, be provided publicly. That is an instinctive feeling that many people have, and I understand and appreciate it and do not dismiss it. However, I do not believe that that view stands up to close examination, for the following reasons.
First, I hope that there are no hon. Members who believe that there is anything inherently irresponsible about private sector activity.

Mr. Hardy: What about the reverse?

Mr. Patten: If the hon. Member for Wentworth (Mr. Hardy), from a sedentary position, is implying that I mean that all public provision is inherently bad, I must state that of course I do not mean that. That would be bizarre.
There is also nothing that makes it inherently impossible for private bodies to provide public services. There is no logical argument to support that case.

Mr. Spearing: Does the Minister mean by contract., or by ownership?

Mr. Patten: By either.
After all, we have only to consider the food industry. There are no state farms in this country. We provide much, although not all, of our foodstuffs. All the food in this country is privately supplied. We all need food to survive, as much as we need water. However, private production is matched by public health standards, laid down by public bodies to ensure that food is wholesome and of the proper quality.
There is no clash of interest in the private production and the public regulation of foodstuffs. Why, therefore, should there be any clash of interest in the private production and public regulation of water? The argument that there would be a clash of interest does not stand up.
It is said that the food industry, with its scope for competition, is different from the water industry. I recognise that. I was about to say, and the words are deathlessly typed in the brief in jumbo type suitable for Ministers to read at the Dispatch Box, that "of course it is different." The Civil Service is marvellously adept at providing such phrases. Those who raise the argument forget the position of the statutory water companies. These cannot simply be dismissed. They are not a non-argument or an intellectual inconvenience.

Mr. A. J. Beith: Will the Minister give way?

Mr. Patten: I shall give way when I have developed my argument.
Since the 1 9th century, the water companies have been an example of the private sector providing a vital service —albeit simply water—on a monopoly basis. They have been doing that for more than 100 years. Twenty-eight private water companies now serve about a quarter of the population of this country. They supply pure water to towns the size of Newcastle and Bristol, and they supply it very well. People have been drinking company water without complaint for a generation. The hon. Member for Berwick-upon-Tweed drinks privatised company water in his area. I shall gladly give way to him if he will tell us how the Liberal and SDP plans for water authorities in the future will deal with the water companies.

Mr. Beith: As the Minister would say, why look in the crystal ball when one can look in the book? It is a pleasure to answer the question, as we were directly involved in preventing the Labour Government from nationalising the private water companies. Those companies provide a specific service—the provision of water—without any responsibility for sewerage, environmental services, and so on, and operate, in effect, as franchised contractors to a publicly accountable water authority.

Mr. Patten: That is a clear indication to the Water Companies Association that the water companies, as franchised bodies, to use the hon. Gentleman's description, have the full support of the hon. Gentleman's party as suppliers of water in the future.
The hon. Member for Houghton and Washington also drinks privatised water. I drank it myself at Gateshead town hall last Thursday, and most people around the table seemed to be drinking it with evident enjoyment. It is no use the hon. Gentleman saying that he never touches a drop, as he once told me that he was a teetotaller. I am sure


that he has no objection to water being supplied by privatised water companies. I shall be pleased to give way if he will tell me what Labour party policy is towards the 28 water companies. [[HON. MEMBERS: "Answer!"] It seems that the Labour party either has no plans at all or it has a secret manifesto and will tell us about its policies at a later stage.

Mr. Spearing: rose—

Mr. Patten: Finally, I must deal with the myth about ownership. There is an idea that no one actually owns the water authorities and that they are not the Government's or Parliament's to do anything with them. That is a very rum argument. The Water Act 1973 created the water authorities, as the hon. Member for Southwark and Bermondsey pointed out. Water authorities are public corporations answerable to the Government. Perhaps anyone who disputes that will tell me what they are if they are not public corporations answerable to the Government and therefore in the public sector.

Mr. Maxwell-Hyslop: In many cases the assets were provided by ratepayers in local government water boards, or in other cases river boards. I do not know what the Minister means by a public corporation. He has not said that its property is vested in the Minister, like the shares in BL, so who does he claim owns it? He thinks that he has answered his own question, but he has not.

Mr. Patten: Local government created many services which were later transferred to other public bodies, which then ran them and extended them. In 1973 Parliament decided that water and sewerage services should he transferred lock, stock and barrel to the water authorities. Debts were transferred as well as assets. My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) was in the House at the time and I was not, so I do not know whether he protested.

Mr. Maxwell-Hyslop: I can tell the Minister what Parliament did not do. This is a matter of public record, not of opinion. Parliament did not vest the water authorities in the Secretary of State or the Government. Does anyone in the House, including the Minister, challenge that?

Mr. Patten: I shall repeat what the situation is when I have dealt with the important point that in 1973, when the assets were transferred to the new public authorities, the debts were transferred at the same time. That fact must not be neglected. Before 1974, sewerage and sewage disposal was supported through the rate support grant system and other grants have been and still are paid to the water authorities, so the taxpayer has also played a part in funding the system.
The Water Act created the water authorities and my hon. Friend the Member for Tiverton agrees that they are public corporations answerable to the Government. They are therefore in the public sector and it is for Parliament to decide what to do with them. If that were not so, they would be very peculiar bodies indeed. If it is the will of Parliament, subject to parliamentary approval, the assets, debts and liabilities of the water authorities can be transferred to wholly-owned Crown companies, which will

then empower the Secretary of State to sell them. The situation with regard to ownership is thus unutterably clear.

Mr. Spearing: On the question of ownership—

Mr. Patten: I was about to begin my peroration, but I was rude in not giving way to the hon. Gentleman earlier, so I give way to him now.

Mr. Spearing: I am grateful to the Minister. He has been patient. On the question of ownership and the Crown, is he not aware that the river Thames and other rivers are part of the water cycle and at one time were owned by the Crown, by the Commissioners of Lands and Forests and now, in the case of the Thames, by the Thames water authority? Are the Government saying that under their legislation the river Thames will be owned by Thames Water Services plc and that its environmental control will be in the hands of the majority shareholders, whether at home or abroad, and accountable only to them?

Mr. Patten: I appreciate the hon. Gentleman's interest in the Thames valley, which I share, because the Thames runs through my constituency. A privatised water authority, wherever it may be, would have a large number of environmental duties, many of which would be subject to the most stringent surveillance by my right hon. Friend the Secretary of State and by the director general.

Sir John Wells: What my hon. Friend has said about the Thames applies likewise to the Medway. Inevitably, there are many navigations. Treatment of the leisure aspect in paragraphs 92 and 93 of the Green Paper was extremely slight, slender and inadequate. I appreciate that today my hon. Friend is dealing with the philosophy and not with the nuts and bolts, but the House is entitled to know where the navigations will be vested after privatisation. May we be assured that the Thames and the Medway will pass, say, to the British Waterways Board or something of that nature? We should be much happier if we could have that assurance today.

Mr. Patten: We are consulting widely with recreational and navigational interests as well as with fishing interests, which are also very important. On my hon. Friend's specific question, it is very important that we maintain and, if possible, improve the concept of integrated river board management. which means the total management of everything within the river basin. That necessarily includes the environment and, I believe, navigation and recreation on those waters, because those activities not only benefit those who enjoy them but may have deleterious environmental effects. That is why it is so important to maintain the concept of integrated river basin management. Indeed, these days in the Smoking Room hon. Members talk of little else.
I am grateful to the hon. Member for Southwark and Bermondsey and his hon. Friends for initiating this debate. I listened with great care to what he said, and I hope that they have listened with great care to what I have said. There is more than one side to the argument that it is impossible to provide a public good privately or that this is only a matter of ideology or profit. There is an area of considerable debate in the middle into which the Government wish to enter. During the next five months we shall certainly listen carefully to all representations put to us, as the hon. Gentleman put them this afternoon.

5 pm

Dr. John Cunningham: We, like the Minister, welcome the opportunity for this debate, and we shall support the motion.
The Minister deserves some sympathy. Certainly I sympathise with him for having a painful sore throat, but he has a painful task in every sense because he seeks to justify what to most people is a patently obvious political expedient, namely, what Lord Stockton described as the sale of the family silver to pay the bills. It is another public asset-stripping procedure which the Government are trying to dress up with philosophical justification.
The Minister talked about increased efficiency, customers' requirements and the position in other countries. I shall return to his arguments about customer's rights and efficiency, but first I shall deal with his point about France. The position in France is different from that which the Government propose for the United Kingdom. In France the water supply only is franchised, as the Minister well knows, and in no country is the complete cycle of water supply and sewerage management and control in private hands. We would be unique if the Government introduced that arrangement into the United Kingdom.
The Minister struck a note of light relief when he asked whether the public believed that water simply came from the atmosphere. At that moment, like water, his argument evaporated because the public are well aware that water is our foremost, most fundamental, natural resource. The public believe that it should he a publicly owned and controlled resource, and we in the Labour party agree with that.
The Labour party is wholly opposed to proposals to privatise Britain's water assets which are the nation's most fundamental resource and on which our existence depends. We believe that the water industry should be publicly owned and controlled and that it should be under democratic control and accountability at both regional and national levels. We further believe that the existing river basin management concept of organising the industry should be retained. In the event of any disposal of those assets, a Labour Government would return them to public ownership as a matter of priority.
Many peoplee inside and outside the House are asking what the point of the proposals is. As recent opinion polls show, even Tory voters no longer agree that tax reductions are in the best interests of the national well-being and should have the priority to which the Government so persistently cling. The Government have announced that the water industry is to be sold. The decision has nothing to do with the performance or efficiency of the industry, and everything to do with financing tax cuts to buy votes at the general election. Despite what the Minister said, the water authorities are not the Government's to sell, and I assure the Minister and his colleagues in the Government that they have not heard the last of this argument.
The Government intend to dispose of 10 regional water authorities in England and Wales at a knock-down price, turning them into privately owned companies. The authorities' assets have been valued at about £27 billion but, as many hon. Members have pointed out, even the most optimistic forecast is that the Government expect to raise only about £6 billion or £7 billion.
The proposed sale will have a disastrous impact on health and pollution control, prices and investment, and

recreation and the environment. No one on the Government Benches, least of all the Minister, has sought to argue that privatisation can or will solve the manifest problems of urgently required infrastructure investment, particularly in our major conurbations, such as the northwest, where mains, sewers and other water authority assets are collapsing at an alarming rate and are in need of fundamental replacement and massive investment. Sewage disposal, water purity, flood prevention, drainage work, greater access to information and to amenities will all be jeopardised unnecessarily and put at risk by the proposed sale.
Throughout their seven years in office, the Government have ignored their statutory duty to promote a national policy for water, and now they are planning to abandon that duty altogether. The argument that to pass customers into the hands of private monopolies is in the consumers' interest is amazingly curious, especially coming from a Conservative Minister. It is the most astonishing volte face that any Conservative Minister could make. Whatever the Minister said about water companies, such as the Sunderland and South Shields or Newcastle and Gateshead water companies, they simply act as agencies for regional water authorities in the supply of water. However much he twists and turns, in reality, virtually all consumers — 99 per cent. of all households — will be connected to private monopoly suppliers, as the hon. Member for Southwark and Bermondsey (Mr. Hughes) said. There will be no competition, there is no competition and there is unlikely ever to be any competition, and Conservative Members know that full well.
Almost an identical state obtains with sewerage services, except that the percentage of households is slightly less, being about 94 per cent. Those are unique circumstances for any major industrial nation, which is another reason why the Minister's comparison is simply invalid. No other major industrial society has its water supply and sewerage system organised in that way, with such high percentages of households connected to private monopoly suppliers.
Furthermore, as the British Telecom experience has already demonstrated, charges to consumers are more likely to increase. In the interests of brevity, perhaps I should quote from the paper produced by the National Consumer Council, which addresses itself to these issues, especially to consumers' interests, and states:
We must conclude that the proposals in the White Paper for privatising the water industry are contrary to the interests of consumers.
We share that view. It is a view widely shared by groups who are not necessarily associated with the policies or the political views of Labour Members and include the Country Landowners Association, the National Farmers Union and many environmental and recreational groups.
Furthermore, perhaps most damning of all in terms of the Government's apparent consumer interest in the matter is that in a long list of what the Minister regarded as achievements of the Government he failed to mention that, as a result of Government policy, the press is excluded from the deliberation of water authorities and undertakings in Britain. The public interest simply cannot be served by those matters being dealt with in secret, out of public scrutiny and the public gaze.
Apparently, according to a recent parliamentary reply from the Secretary of State for the Environment, the House is to be treated accordingly. As during the passage


of the legislation to abolish the metropolitan counties, the Government refuse to publish the responses to their proposals they have received from interested bodies and organisations.
In answer to my question on Thursday 12 June, the Secretary of State replied:
My Department has received 280 letters from organisations and others, following publication of the White Paper. It is for the originators of those letters to publish their views, if they so wish."—[Official Report, 12 June 1986; Vol. 99, c. 311.]
The Secretary of State refuses to make that information available to the House as it should be made available for debates such as this and especially for debates on legislation.
Even—I say "even", but perhaps I should say "also" —the Financial Times and The Economist have poured scorn on the proposals. On 4 June, the Financial Times concluded a leading article by saying:
The Government needs to consider whether, given its other pressing priorities, the time and effort devoted to this ca use"—
that is water privatization—
will be justified.
Earlier this year, The Economist, in an article headed "Water Goes Private", said of the Government's arguments, "They are not convincing." That was very much an understatement. It is a good question to ask—I notice that the Minister did not advance any answer or argument—who supports the Government's proposals to privatise the water authorities. No one in the Opposition and few, if any, of the organisations which have already published their views or their evidence support them.

Mr. Gow: Conservative Back-Bench Members support the Government's privatisation proposals. The hon. Gentleman was asking who supports the policy of privatisation. I invite him to await the results of the Division, which will take place in a couple of hours' time.

Dr. Cunningham: We have heard such words of bravado before, especially on policy matters emanating from the Department of the Environment. Under successive Secretaries of State, as time has gone on, the majorities have declined, the abstentions have increased and the votes in the Labour Lobby have come, I would say not thick and fast, but consistently against Government policy. We shall see what happens on this issue.
What of the arguments about the much-needed investment in the industry? I quote figures which neither I nor the Labour party have produced, but which come from the survey of the Government's record carried out by the Chartered Institute of Public Finance and Accountancy:
Over the last 5 years capital investment by the water authorities, repriced on the basis of the Retail Price Index, has declined by 13 per cent.… If these figures represent an accurate picture works are not being replaced as fast as they are wearing out because allowance has also to be made for new works to serve new customers and raise evironmental and service standards.
That is an indictment of the Government's record during the past five years. Against that background of a deteriorating water industry, of a shortfall in capital investment, in addition to that which we know historically exists and which is not the fault of this Administration

alone, is it realistic to suppose that investors will want to take on those organisations? Even if they do, will they bring forward that desperately needed capital investment to safeguard water supply and sewerage systems, the health of the nation and the industrial and economic health and well-being of the community?
It is clear that investment cannot lead to a bigger market share. Investors can receive a return only through increased charges or reduced expenditure. Everyone knows that the latter needs to be substantially increased. Again, I refer to the private sector and quote Mr. Stanley Hill of Arthur Collins and Co., who summed up the Government's proposals thus:
So the financial assessment, in essence, becomes a simple one. Whatever the Chancellor takes out of the industry on floatation of the companies and by subsequent annual taxation has to be made good by increased charges on consumers or a reduction in future capital investment, or both. Perhaps this axiomatic deduction was obvious from the start.
The Government have produced no answer to those challenges.
On drinking water purity, about 10·8 million people in Britain receive drinking water on which the Government have had to issue waivers from the standard required by the EEC. Those figures were given in a parliamentary answer in response to my hon. Friend the Member for Rother Valley (Mr. Barron).

Mr. John Patten: Does the hon. Gentleman recognise that Britain was probably the first of all EEC countries to implement the Community drinking water directive, and that more than 90 per cent. of our water supplies already meet all of the 64 parameters of that directive? Does the hon. Gentleman recognise that that is a considerable achievement which compares well with any other European country and that we are working quickly and hard to ensure that the remaining 10 per cent. come up to the same standard?

Dr. Cunningham: Ten point eight million is approaching 20 per cent. of the population of Great Britain. That number of people receive drinking water below the required standards. Notwithstanding the Minister's comments, I assure him that those figures were provided by his Department in a parliamentary answer. If I cannot produce that answer now, I can produce it later.
Similarly, the position on pollution and sewage control is deteriorating. The Guardia,, said today that the Mersey basin project, widely supported and overwhelmingly necessary, is falling behind. The rate of pollution is outstripping the major investments which have taken place.

Mr. Allan Roberts: Will my hon. Friend comment on the fact that, only a few months ago, the Ministry of Agriculture, Fisheries and Food delayed the dredging licence to the Mersey Docks and Harbour Board, which could have meant the closure of the port of Liverpool because of the amount of mercury that was being dredged out of the estuary and dumped in Liverpool bay? The pollution of mercury and sewage in the river Mersey is such that no one in his right mind—no private capitalist —would want to buy what is an open sewer unless he could make much money out of consumers in the northwest of England by selling water.

Dr. Cunningham: I am grateful to my hon. Friend for his intervention. I wish that hon. Members would pay


more attention to problems of that sort, and a little less attention to some of the problems which occur in my constituency from time to time. I am not referring to my hon. Friend the Member for Bootle (Mr. Roberts) in that regard.
The Minister of State referred to reported correspondence between himself and the chairman of the North-West water authority on these and other issues, and he said that the chairman's reply outlined the authority's plans for further capital investment. Perhaps I could tell the House exactly what the chairman said, because I have a copy of the Minister's letter of 5 June 1986 about the EEC bathing water directive as it relates to the position at Blackpool, and a copy of the reply from the chairman, Mr. Dennis Grove, dated 12 June.

Mr. John Patten: Since the hon. Gentleman is referring to that correspondence, it will help the House if I place copies of it in the Library. I am in favour of open government.

Dr. Cunningham: I am delighted to hear the Minister of State say that, even before I begin to quote the correspondence. However, if he is so keen for it to be in the Library, why did he not deposit it there previously?
The Minister said in his letter:
If the case concerning Blackpool were to be decided against us"—
he is referring to a threatened prosecution of Britain by the European Community because of the raw domestic sewage on our beaches and littoral—
there would be no alternative but to set about urgently bringing Blackpool up to standard and to identify many more waters; we would then lose valuable flexibility.
Of course, flexibility refers to privatisation, not public health. It continues:
An action before the European Court during the privatisation discussions or flotations would have wide-ranging implications going well beyond Blackpool".
He can say that again. The Minister continued:
I need to know when a scheme could be started, when it could be completed, and what its cost and effects would be.
The Minister said that the chairman replied outlining his plans. That was not entirely accurate. The chairman said:
I fully appreciate the national sensitivity of this matter, and will be glad to do everthing possible to help you in handling it satisfactorily … We cannot give priority, for the foreseeable future, to securing higher bacteriological standards as envisaged in the EC directive on bathing waters … I acknowledge the special circumstances applying at Blackpool, as set out in your letter … we will make provision in our forward capital programme for further improvements of the coastal waters in the Blackpool area, with the aim of reaching EC standards so far as this is feasible…
I must emphasise that we do not believe it is possible to achieve these higher standards at Blackpool, within our existing resources, without a significant impact on other programme areas such as the Mersey Basin Programme or coastal waters in other parts of the region.
The Minister was ill-advised to deal with the matter as he did in the debate, because, as the chairman of the North-West water authority makes clear in that letter, there is, frankly, not a cat in hell's chance of the water authority reaching the required standards within the financial framework imposed upon it by the Government. It is a scandal that it is being urged to reallocate resources just to try to obscure this matter in the interests of privatisation. That is the burden of what is being

proposed, and I can tell the Minister of State that it is absolutely disgraceful that the Government should be proceeding in that way.
There remains a fundamental conflict between the cost of environmental safeguards of the sort which I mentioned and the need to meet the financial requirements of prospective shareholders. What is more, many of the improvements in the existing systems of control, outlined in the Green Paper, could be more effectively introduced by retaining the water authorities in the public sector. Furthermore, the quality objectives and controls which the Government have undertaken to impose would require a large central inspectorate to ensure proper enforcement.
Another major concern of the environmental world is the influence of the privatised authorities on land use planning and infrastructure development. Major conflicts of interest could arise if certain sectors of industry held substantial interests in the authorities. These are all questions to which the Government have not produced answers, nor indeed have they attempted an answer.
Privatisation would be bad for those employed in the industry. The unions, representing the tens of thousands of workers in the industry, have heard the message loud and clear. Perhaps I should say that I am a Member sponsored by the General, Municipal, Boilermakers and Allied Trades Union. People believe that not only their jobs and their contracts, but their pension rights will be threatened, as happened with the National Bus Company, British Telecom and others.
It was exactly those issues of water purity, public health, coherent policies necessary for pollution control and sewage disposal, strategic investment and security of supply which originally caused water to become a public utility and monopoly. There remain overriding reasons for retaining water in public ownership and control.
The Government's timetable envisages a Bill being introduced in the House in the autumn of this year. That Bill will not reach the statute book, if it ever does, before the summer of 1987. Proposals for the sale of those important public assets will presumably be launched in the immediate run-up to a general election. I make it clear that a Labour Government returning at that election would stop those proposals in their tracks and take back any privatised resources.

Mr. Ian Gow: This debate has taken place in the absence of the leader of the Liberal party and with only the intermittent presence of the leader of the SDP. We have just listened to the hon. Member for Copeland (Dr. Cunningham) promising that the Labour party, if returned to office, would take back into public ownership any water companies which had been transferred into what I call genuine public ownership. Mercifully, my hon. Friend the Minister of State and the Government will in no way be deterred from their sensible purpose by the hon. Gentleman's threat.
I shall make two observations about the hon. Gentleman's speech. He said — this is a widely held misunderstanding—that the 10 water authorities, nine in England and one in Wales, were being starved of capital investment. The hon. Gentleman knows that this year about £I billion of capital investment is being undertaken by the water authorities. Contrary to what he and— I almost said his hon. Friend — the hon. Member for Southwark and Bermondsey (Mr. Hughes) said, the


investment in the water industry over the past seven years has been that which is required to keep our sewers in good condition. It is a great misunderstanding, common on Opposition Benches, to say that our sewers are in a serious state of disrepair. They are not. There are particular problems in the North-West water authority area, but the overall condition of our sewers is good.
Mr. Simon Hughes: The hon. Gentleman questioned the disrepair of sewers. A recent parliamentary answer shows that in the last year for which figures are available, in one region, Yorkshire, there were 1,350 significant sewer collapses, and figures for other regions were 280, 4,921, 260, 230 and 280. Surely the hon. Gentleman is not trying to pretend that in any of the 10 authorities there is not a major problem of sewer disrepair?

Mr. Gow: I am indeed disagreeing with the hon. Gentleman, because I am asserting the opposite. There are problems in some areas, but overall the condition of our sewers, many of which were built in the Victorian age, is satisfactory. I give way to the hon. Member for Copeland (Dr. Cunningham).

Dr. Cunningham: I am grateful to the right hon. Gentleman.

Mr. Gow: I am not a right hon. Member.

Dr. Cunningham: Just be patient. I am grateful to the hon. Member for giving way so early in his speech. As he challenged the point that I made, let me remind him, although I do not think that he needs reminding as not too long ago he held these responsibilities, of the existing problems. The average for each of the past three years is more than 4,000 significant sewer collapses. That figure does not include the minor collapses. If the hon. Gentleman does not regard that as a problem, I assure him that we do.

Mr. Gow: I commend to the hon. Gentleman the report of each of the nine English water authorities and the one Welsh water authority, where he will see that the chairmen of the boards of these companies set out, in some detail, the condition of the sewers for which they have responsibility. After studying those, as I am sure that the hon. Gentleman, if he has not done so already, will revise his opinion.
The hon. Gentleman referred to an observation by my noble Friend Lord Stockton and to his widely reported criticism that those who sit on the Treasury Bench are selling off the family silver. However, the great misunderstanding under which both my noble Friend and the hon. Member for Copeland labour is that whereas if one sells the family silver it is no longer around, if we sell the water authorities to the people, as I am delighted to say we shall, the assets remain. Therefore, the analogy about selling off the family silver is most inappropriate.

Mr. Spearing: Although it may not be selling off the family silver, because that money is still available to Her Majesty's Government for distribution to the rich people, they have created money that is not theirs out of thin air, where the moisture comes from and disappears to. This is a conjuring trick of doubtful morality.

Mr. Gow: I was disagreeing with my noble Friend Lord Stockton over the analogy about selling the family silver,

because if one does that the silver is no longer there. If, as I hope, we sell the water authorities, all the millions of pounds worth of assets will still be there and will still be at the disposal and the service of the British people.
We have had a very interesting debate. I am sorry that the hon. Member for Bolsover (Mr. Skinner) is no longer here. The debate is interesting because we have seen once again that alliance between the Socialist party and the Liberal party that we saw in the Parliament between 1974 and 1979. Here we have the once-mighty Liberal party opposing a measure of privatisation and opposing the opportunities for employees of water authorities and customers to become owners. I give way to the hon. Member for Rochdale (Mr. Smith).

Mr. Cyril Smith: I was not asking the hon. Gentleman to give way, but I am grateful to him for doing so. I was merely going to make, I confess from a sedentary position, the following point. I understand the hon. Gentleman's deep concern about the Liberal party, because he is the hon. Member for Eastbourne, where, as I understand it, the Liberal party is in control of the council. We judge each privatisation measure on its merits, and we do not think that water authorities fall into the category of services that should be privatised.

Mr. Gow: I wish to give some comfort to the hon. Member for Rochdale. He will be pleased to know that those who are joining him in the Lobby tonight—we have heard from the hon. Member for Copeland that the Socialist party will be joining the Liberals—have their problems. The Labour party candidate at Eastbourne in the last general election, and that in 1979, lost his deposit. I confidently expect that the Socialist party candidate will again lose his deposit. The hon. Member is right to say that, for the time being, the Liberal party controls the borough council. However, I do not wish to be diverted by those who sit below the Gangway.
I have two reasons why I believe that the motion moved by the hon. Member for Southwark and Bermondsey is thoroughly misconceived. I have been in this place for only a short time, but I point out to my hon. Friend the Minister for Housing, Urban Affairs and Construction, to my hon. Friend the Under-Secretary of State for Wales and even to my hon. Friend the Lord Commissioner to the Treasury that nothing has occurred during my time in this place to lead me to believe that superior wisdom is given to Her Majesty's Ministers. I would have made the same observation when I had the privilege of being one of Her Majesty's Ministers.
I view with great enthusiasm the prospect of taking ownership and control of the water authorities away from the state. I hope that my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) will be able to catch your eye, Mr. Deputy Speaker, because he will be able to give an interesting seminar on the question of ownership. I shall base my remarks on the idea that water authorities in England are owned by my right hon. Friend the Secretary of State or by the Government, and that the Welsh water authority is owned by my right hon. Friend the Secretary of State for Wales or by the Government.
I am pleased about the prospect of privatisation of the water authorities, because we shall take a significant element of ownership and control away from the few—Her Majesty's Ministers — and transfer them to the many. I welcome that because, to take my constituency,


our fresh water is supplied by the Eastbourne Waterworks Company which is privately owned. I am delighted that my hon. Friend the Member for Harrow, West (Sir J. Page) is in his place. He is a director of the Colne Valley Water Company, but that is not the only distinction that is enjoyed by my hon. Friend. He will correct me if I am wrong, but I think that he is a vice-president, no less, of the Water Companies Association. I shall give way to my hon. Friend if I am wrong.

Sir John Page: No. My hon. Friend is marvellous!

Mr. Gow: My point is that I have great confidence in my hon. Friend the Member for Harrow, West, who is a director of a private water company. The Eastbourne Waterworks Company, which supplies all my constituents with fresh water, is an excellent company and is very well run.
Another advantage will flow from the privatisation of the water authorities. At present, no hon. Member is able to serve as a director of a water authority. It would he an office of profit under the Crown. I have thought of some posts that might be available for the Liberal party after the next general election, or even for some of those who are returned to this House after the next election, or even for my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath). He would be able to serve as a director of a privatised water authority. That is a byproduct of the advantage of privatisation.
The important element in the scheme that has been announced by my hon. Friend the Minister is that we shall spread ownership widely among customers and employees. The trouble is that the once mighty Liberal party, which used to he in favour of spreading ownership, has now been led astray by the Socialists who sit on that side of the House. That is very sad.
My hon. Friend the Minister knows very well that at present the chairmen and boards of water authorities have to go to him and to my right hon. Friend the Chief Secretary to the Treasury for permission to invest money.

Mr. Brian Sedgemore: The hon. Gentleman voted for it.

Mr. Gow: What I am saying is that I am in respectful disagreement with the present system, whereby water authorities first have to come to my hon. Friend the Minister for Housing, Urban Affairs and Construction. They used to come to me.

Mr. O'Brien: Why do the Government not change the system?

Mr. Gow: We are changing it. The Opposition ask why the Government do not change it, but that is exactly what my hon. Friend the Minister has announced this afternoon.

Mr. O'Brien: That is stupid.

Mr. Gow: The hon. Gentleman ought not to rebuke me. On 7 February 1985 I announced a change of policy. I told the House of Commons on 7 February 1985—my hon. Friend the Minister will correct me if I have given the wrong date—

Mr. John Patten: My hon. Friend is absolutely correct.

Mr. Gow: I am obliged to my hon. Friend. I told the House that the Government would be considering the

possibility of privatising the water authorities. One of the reasons for my announcement to the House of Commons, after 'consultations with my right hon. Friend the Chancellor of the Exchequer, was that my right hon. Friend the Chancellor, my successor and the Government believed that privatisation was right.

Mr. O'Brien: Will the hon. Gentleman give way?

Mr. Gow: I shall gladly give way to the hon. Gentleman, but he ought not to try to interrupt me from a sedentary position.
I want to take away from my hon. Friend the Minister for Housing, Urban Affairs and Construction, however excellent a Minister he may be, and from my right hon. Friend the Chief Secretary to the Treasury, however excellent he may be, the decision about how much money should be invested in the water industry. Those who, I believe, are best qualified to make judgments about the required level of investment are the directors of the water authorities.

Mr. John Patten: That is quite right.

Mr. Gow: I am delighted to have my hon. Friend's approval for my two philosophical points. The first is wider ownership, through customers and employees. The second, and important, aspect is that I want to give more freedom to those who are engaged in running the water authorities.
I very much welcome this debate. I deplore the way in which the Liberal party has been led astray by its Socialist comrades, and I want to assure the hon. Member for Copeland that the Government will not be deflected from their chosen and right path because of the threat of renationalisation that he made during his speech.

Mr. William O'Brien: First, I intend to comment on the speech of the hon. Member for Eastbourne (Mr. Gow). He has been applying whitewash to the Minister's contribution. As my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) said, he ran out of whitewash at the end of his contribution.
When the hon. Member for Eastbourne had responsibility for the Department he could have allowed those who were responsible for running the water authorities to invest in them, if he had thought that that was correct. There is no reason for saying that the only way in which to attract investment in the water authorities in order that services may be provided by those authorities is to privatise them. That is sheer poppycock. If the hon. Member for Eastbourne had given the right to invest to water authorities when he was responsible for them, a better service could have been provided than that which will be provided under private ownership. The hon. Gentleman made the existing water undertakings faceless by means of the Water Act 1983, which provided that the discussions of water undertakings should be held in private. The hon. Gentleman has a great deal to answer for.
Much has been said in this debate about water supplies, and reference has been made to private water undertakings, but little has been said about the sewerage operations that are undertaken by water authorities. Since 1974, the responsibility for sewerage has been given to the district councils. This has been under an agency


arrangement, in accordance with section 15 of the Water Act 1973. It provides that district councils should act as agents for sewerage management. The existing agreements were renewed in the provisions of the Water Act 1983. There has, therefore, been good sewerage management by local government since 1974.
Reference was made earlier to the fact that sewerage management and sewage disposal was a local authority responsibility before 1974. Therefore, local government maintained and provided a proper, efficient and safe sewerage system throughout the country. That was demanded by the numerous Public Health Acts. They were the basis for bringing local government into being and for the maintenance of our sewerage system. The management of sewerage has not changed. It is still with local authorities. I consider that this very important service to the community should always be controlled by Parliament through local authorities which should be accountable to the public. If not with a water authority, it should be with a local authority. It is against that background that I believe that the Labour party should, as my hon. Friend the Member for Copeland (Dr. Cunningham) said, bring the water undertakings back into public ownership under the control of the regional water authorities when it next takes office.
I, like many hon. Members and organisations outside, believe that sewerage and sewage treatment are the least likely local activities to lend themselves to privatisation. The point has clearly been made that there is little profit in sewerage systems and sewage disposal. Had there been any profit private undertakings would have been involved earlier, so there is no doubt that there is little profit in the privatisation of sewerage systems and sewage disposal. If those activities, were returned to local authorities, it would complement their other environmental functions such as waste disposal, highway drainage, conservation, recreation, land drainage and the quality of rivers and river discharges. Local authorities are much involved with the functions that we are considering this afternoon.
The new metropolitan districts which came into being a few weeks ago are large enough, and have the expertise, to carry out the functions of sewage disposal. If privatisation were allowed to take place in the same way as previous undertakings have been privatised, there would be a further loss of jobs and job opportunities in local government. People employed by the metropolitan district councils, both in administration and design work and in manual work, would be affected. That should be made clear by the Minister out of respect for those who are doing a useful job in that area.
Sewerage schemes are in the main drawn up by local authorities and presented to water authorities for their consideration and acceptance. The priority approved by the water authorities is looked at on a regional basis, and that is correct. I underline the fact that the original proposals come from the local councils, and the water authorities decide priorities on a regional basis. However, the initial input comes from the metropolitan district council, and that is important in helping the water authorities to decide where priorities lie.
The work carried out by local authorities on behalf of water authorities is substantial. The White Paper, "Privatisation of the Water Authorities in England and Wales", shows, on page 10, table 2, that out of a capital

budget of £867 million for 1985–86, £267 million was spent by water authorities under the agency agreement with local authorities. Therefore, substantial work is undertaken by local authorities. It is widely accepted within the water authority areas that the authorised agencies give good value for money compared with the engineering consultation fee structures. Therefore, much needs to be looked at in relation to the functions of local authorities and agency arrangements with regional water authorities.
The Minister referred to people who have responded to the consultation documents that have been sent out. As my hon. Friend the Member for Copeland said, no responses to those consultation papers that have been submitted to the Department of the Environment have been submitted to the House for our consideration. However, I have a copy of a letter from the Bradford chamber of commerce that was sent to the Minister. That letter dated 28 April 1986—only a few weeks ago—makes it clear that the Bradford chamber of commerce has discussed the subject in its specialist committee and at a chamber council meeting. Therefore, the matter has been widely discussed by the Bradford chamber of commerce which comes under the area of the Yorkshire regional area authority. It says:
The White Paper proposals were studied, especially the Government's suggested benefits of privatisation. Soundings were taken of large water users in the area with emphasis within the wool textile industry.
Bradford needs a good supply of clean water for the textile industry and that is why I am quoting this letter. It goes on:
The textile trade association have made their views known that they oppose the principle of privatisation. The Yorkshire Water Authority have discussed and given a very guarded welcome.
That response comes from people who operate private businesses in west Yorkshire.
The Minister told my hon. Friend the Member for Copeland that he could not lip-read, but I hope that he can read the message that is coming from the Bradford chamber of commerce in particular, but also from many other organisations with no affiliation to the Labour party. The Bradford chamber of commerce gives a number of reasons for its opposition to the principle of privatisation. I hope that the Minister will make those views in particular, and the views of others who have responded to the consultation papers, available to hon. Members.
The Government have previously stated that, under privatisation, decisions would be taken for sound business reasons, and that is also implied in the document. However, the chairman of the North-West water authority, Mr. George Mann, said that sound business reasons led to filth being poured into the river Mersey for decades. Would a private company worry about that? The authority is spending millions of pounds trying to clean up the river. A great deal of money is also being spent on cleaning up the rivers Aire and Calder. I and my fellow Yorkshiremen fear that that investment programme will not continue after privatisation. We are also concerned about the river Don and other rivers in Yorkshire.
If the Government go ahead with privatisation, the Labour party pledges itself to take the industry back into public ownership and public accountability. There has been mention of the benefits that will accrue to workers in the industry, who will be allowed to purchase shares in addition to the shares that they will be given As I asked in an intervention earlier, will the workers have the right


to vote on decisions affecting the operations and the boards of the new privatised companies? Those golden shares—

Mr. John Patten: All shareholders have the right to vote at annual general meetings and special general meetings of properly constituted public limited companies.

Mr. O'Brien: That is something that we have obtained—

Mr. Cyril Smith: The hon. Gentleman should ask the Minister what percentage of shares will be held by the workers in the industry, and how representative will their voting be.

Mr. O'Brien: When the Minister replies he will no doubt tell us the value of the shares to be given to the workers and also how much say the workers will have in the operation of the industry. After all, the Government have made great play about the shares that will he offered to workers.
A report in the Reading Evening Post on 21 February 1985 suggested that the chairman of the Thames water authority, Mr. Watts, and its directors had held top level secret meetings with City merchant bankers about the funding of the new company. If that is true, as the hon. Member for Rochdale (Mr. Smith) suggested, the real influence on the privatised undertakings will come not from the workers or customers who hold a few shares but from the merchant bankers.
The Minister admitted that there would be no restriction on foreign investment in the privatised regional water authorities. The Yorkshire authority could, therefore, be run by Americans, if they invested, who could then call the tune on the level of services for the area —

Mr. John Patten: The hon. Gentleman probably did not hear what I said, although he can read it in Hansard tomorrow. I was referring to the general welcome for foreign investment across the board. The Government will retain a golden share to ensure that the sort of problems mentioned by the hon. Gentleman could not happen.

Mr. O'Brien: The implication was that there would he no restriction on the amount of foreign money that could he invested in the privatised undertakings. However, I accept what the Minister said about the Government ensuring that a substantial amount of local money would be involved.
This is a short debate, so I shall not comment on the water aspect. As I have said, the sewerage system is important, although it has not been heavily involved in the discussions to date. I appeal to the Minister to consider what would happen to the sewerage system under privatisation. If it must be sold, it should be taken over by local authorities to ensure a satisfactory service.

Several Hon. Members: rose—

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. Perhaps I could help the House. It is interesting that five hon. Members have addressed the House, all of whom have referred to this being a short debate. The debate has now lasted for more than two hours and must end by 7 o'clock. I appeal for brevity. I am sorry for hon. Members who are waiting to be called.

Sir John Page: I hope that the hon. Member for Normanton (Mr. O'Brien) will forgive me if I do not take up his argument, because I especially want to address my remarks to the water companies. My declaration of interest was most handsomely and fulsomely declared on my behalf by my hon. Friend the Member for Eastbourne (Mr. Gow). I am a director of a water company and the deputy president of the Water Companies Association.
I have a very long, very full and very well prepared speech, which regretfully I shall have to concertina rather more than I would wish. It was with pleasure that I noted the amount of knowledge and interest in water companies shown by hon. Members on both sides of the House. There are 29 water companies, of which 28 are members of the Water Companies Association. They supply water to 25 per cent. of the population, and the water goes to more than 200 constituencies, as I found to my cost as I am currently writing to the Members of Parliament for each of those constituencies. The water companies have been doing a good job in supplying wholesome water for more than 100 years.
Until the 1973 Act, there was no question of agency or franchise; they were independent companies, and the Act made little, if any, difference to their operation. Of course, capital financing does not constitute a burden on the public sector borrowing requirement. When the 1973 Act became law, there was some argument about whether the statutory water companies should remain. They were kept, and during and since the transition they have provided continuity and stability in the industry. When the water authorities are privatised, the statutory water companies —which the White Paper states will be retained-will provide valuable competition by comparison. As a result, 25 per cent. of water supplies w ill he free of any accusation of monopoly.
I shall mention two or three subjects briefly, as the Water Companies Association will be sending its response to the White Paper to my hon. Friend the Minister in a few weeks' time. Indeed, the water companies are grateful for the courtesy, interest and care shown by my hon. Friend the Minister, by my right hon. Friend the Secretary of State and by officials in their Department. At present, the companies pay water authorities for the water that they abstract. If plcs were created, they would have a monopoly, which might put the companies at a disadvantage. I hope that my right hon. Friend the Secretary of State will pay particular attention to that point when drawing up the Bill.

Mr. John Patten: My hon. Friend will be pleased to hear that we intend to ensure that no water services plc is in a monopolistic or exploitive relationship with a statutory water company. We intend to make certain that the Director General of Water Services can ensure that bulk transfers are properly and fairly priced.

Sir John Page: I am grateful to my hon. Friend for that generous and clear response, which is typical of his helpful and robust attitude towards this issue.
We must also consider the importance of securing our water resources in future. As it is almost certain that the planning time will he longer than the time covered by licences granted to those water services plcs., we feel that that should be retained in the hands of my right hon.


Friend the Secretary of State. We also feel that to impose the same price formula for the whole industry would make things so bland as to be almost meaningless.
Moreover, the water companies have the greatest reservations about the removal of the control over the maximum dividend payable to shareholders. At present, my right hon. Friend the Secretary of State sets the limit for the maximum dividend, and it is laid down in law that the surplus must be returned to the consumer by a reduction in water charges in future years.

Mr. Maxwell-Hyslop: Hear, hear.

Sir John Page: I agree with my hon. Friend, but the water companies are not blindly hostile to the idea of becoming WS plcs. We believe that the statutory water company and its present modus operandi should be retained. We are happy with the controls on prices, and the control on dividends should also continue. There would then be some check on the price, service and efficiency offered by a new WS plc.

Mr. Geoffrey Lofthouse: Profit.

Sir John Page: I am deeply fond of the hon. Gentleman, but he cannot divert me from his sedentary position —[Interruption.]—and I shall not give way.
If the WS plcs provide a better service, with water of a higher quality and at a cheaper price than that provided by the statutory companies, the latter will deservedly disappear. But while the new companies prove themselves, the statutory companies should be allowed to retain their present arrangements. What is the snag? It can only be that two different sorts of undertaking would be providing water in England and Wales. That is the case now, and vive la difference. [Interruption.] As the great party of Europe is here, it may not be necessary for me to translate for the alliance.
When British Telecom was privatised, an enormous effort was made to ensure that there was competition, and Mercury was set up to that end.

Mr. Patrick Nicholls: Will my hon. Friend give way?

Sir John Page: If my hon. Friend does not interrupt me, he will probably have a better chance of speaking. I am now galloping round Becher's Brook for the second time and am nearly at the finishing post. I shall not fall.
The beneficent Lord has smiled on my hon. Friend the Minister and my right hon. Friend the Secretary of State, because, instead of having to provide extra competition, as happened in the case of BT, they have the perfect tool of competition at hand in the shape of the statutory water companies. If legislation were enacted and statutory water companies did not exist, my hon. Friend the Minister would have to go to the enormous trouble of creating them. The only disadvantage is that, by retaining them alongside the WS plcs, there will be less uniformity and harmonisation and bureaucratic neatness.
Fortunately, the Government do not worship at the altar of those household gods. In fact, I think that they would be rather iconoclastic about them. I am getting rather intellectual now, but when one speaks to a Minister from Oxford one has to get on. Thus, I leave it to the wisdom and farsightedness of my right hon. and hon.

Friends, and feel sure that they will retain the statutory water companies in essentialy the same form as present, so that they can continue to provide a service and a comparison for the people of England and Wales, just as they have done in the past 100 years.

Mr. Ian Wrigglesworth: I shall be as brief as possible at this late stage in the debate. I am pleased to speak after the hon. Member for Harrow, West (Sir J. Page), because even if he does not oppose the Government's intentions he is certainly anxious about them. Indeed, he expressed some of the anxieties that have already been expressed from these Benches.
I shall respond to the case—if one can describe it as that—that has been made for the privatisation of the water industry by the Minister, and rather more succinctly by his predecessor, the hon. Member for Eastbourne (Mr. Gow).
The hon. Gentleman said that the Government were right to privatise because they intended to spread ownership and to remove water authorities from Treasury control. However, he began by boasting about the £1 billion invested by the water authorities, despite Treasury control, which he regretted. He boasted and regretted at the same time.
Many of us believe, despite what the Minister said, that it is possible for public authorities to go to the market. It is reasonable to suggest that the success which the water authorities and other public sector authorities have achieved in providing a service is testimony to the effectiveness of the present system. We see no reason to change that system.
The hon. Member for Eastbourne talked about spreading ownership. If he regards turning a vast public monopoly into a private monopoly as providing the consumer with a better service and that that is decentralising and pushing away control, we profoundly disagree. We do not believe that such spread of ownership is advantageous. Indeed, many of the new owners will be the highest polluters of our rivers and waterways. That is another reason why this spread of ownership is not desirable.
If the hon. Gentleman wanted to extend ownership to employees in the industry, we would not disagree. There is a good case for giving employees in such enterprises a financial stake in their own business, but that is different from taking control out of public hands and putting it into private hands.
The Minister referred to a number of other arguments. In his justification of the privatisation of the water industry, I expected him to say that the present system was hopeless and was not providing the consumer with an adequate service, that it was damaging the environment, not providing anglers with the service that they require and not providing leisure facilities. Alternatively, I expected him to boast that under privatisation all anglers and all domestic and commercial users of water would receive a much better service, be provided with cleaner water and benefit from the privatisation which the Minister claims is the answer to the industry's unknown problems. He did not do that.
The Minister said that privatisation would provide the industry with the opportunity to obtain capital from the market, but it can already obtain that capital from the market. The Northumbrian water authority has obtained


vast amounts from other parts of the world to build the Kidder dam. The trouble is that the Government's bookkeeping insists that such borrowing be included in the PSBR, and that conflicts with the doctrinal view of Ministers and Conservative party supporters that the PSBR is the sacred cow which must not be expanded. One of the arguments is that that would crowd out other money in the market. There was no crowding out problem when BT shares were launched on the market, nor is there in the prospects of launching British Gas shares. I cannot see that that argument applies. It is a bogus argument.
The Minister said that there would be tough regulation of the water industry. 'Why is there a need for tough regulation, if the present system is working satisfactorily? I thought that the Government were against establishing new quangos and public bodies. If the Minister wants the best regulation, he should have competition, but water is the most natural monopoly. If any industry is to be a candidate for privatisation, water is surely the last such industry because of its natural monopoly.
We have said that we support privatisation when clear competition is possible, when the consumer has a choice and when there is a guarantee of efficiency because of competition. This is the last industry for which competition should be introduced, and we are therefore opposed to the Government's privatisation measure. The Minister says that there will be tighter control over water quality. It is difficult to see what can be achieved under privatisation that cannot already be achieved under public control.
For all the reasons that I have explained, we reject the Government's privatisation proposal. If the Minister were able to come to the House and assure us that services would be improved, we might take a different view.
I fear that anglers will be charged fees that they cannot bear by private companies out to make a profit, that boating and other leisure facilities, will cost more under privatisation because companies have profits to make and are not there to serve the public interest, that there will not be a guarantee of a better supply, and that pollution control will not be improved because it is not in the interests of a private company to provide such facilities. That is why I believe that the Government have got it wrong, why the proposition will be opposed in the country and why we shall oppose it in the Division Lobby.

Mr. Patrick Nicholls: In any programme for privatisation two essential ingredients are necessary. The first is competition, and the second is a reasonable prospect of a proper sum of money being made from the sale of assets.
However we feel about the principle of privatisation, in all the other Government privatisation schemes it has been possible to see competition resulting, or to create competition. That was true even for British Telecom, and it turned out to be so, whatever the misgivings. As the hon. Member for Stockton, South (Mr. Wrigglesworth) said, it is difficult to envisage any other sector of life in which there is less likely to be competition than in the supply of water. Unless we pretend that in future there will be alternative reservoir and supply systems for the same householders in the same area, there can be no competition in a real sense.
It is said that we shall gain efficiencies within a privatised system for the benefit of the consumer. So far,

so good. But that cannot exist in a monopoly. If I create efficiencies in my business as a solicitor, I pass the benefits on to my clients not out of the goodness of my heart, but because, if I do not, my competitors will. In a sense, I have to share the benefits of my efficiency with my consumer. I cannot accept that the mere creation of efficiency will, of itself, help the consumer.
I cannot see how the competition argument for privatisation plays any part in the discussion about the privatisation of the water industry. I am not entirely convinced, subject to what my hon. Friend the Minister might say, that the competition point has been made.
Even on the question of raising money there is no certainty that this will he the sale of the century. Briefly, the argument is that if there are to be sufficient safeguards in terms of all the environmental considerations, and if we are to be able to guarantee the supply of water to consumers at a politically acceptable price, we must impose severe restrictions on the commercial companies which take over. If we impose sufficient restrictions for environmental safeguards and for the supply of water at a politically economic price, how attractive will the industry be on the open market'?
I am wondering about the possibility of creating a white elephant. I understand the arguments that are advanced in favour of the Thames water authority. On the other hand, I wonder how the extremely good chairman of the water authority in my area would feel if he were told that he had to supply water at a commercial rate to an isolated householder on Dartmoor? I think that that might worry him a great deal, and he might wonder in the end what he could do about it.
It seems that there are three possibilities. First, we could impose all the necessary restrictions to ensure that care is taken of all environmental, safeguards so that water is supplied at a politically acceptable price. Alternatively, the Government could find themselves with a white elephant that no one wants to buy.
There is a more sinister possibility, however. If a commercial entity could be found to take over the companies, with sufficient restrictions, what would happen if at some future date that entity were to say to the Government, "We tried it out, having taken on board a unit with all the restrictions that you imposed, and we are saying that, unless we push up the price in the areas where we know we can make a profit, we shall no longer be able to make a profit"?
The Government might have to agree to the relaxation of restrictions, with all the political consequences that would ensue, which I do not have time to elaborate. Alternatively — and to take an extreme example — the Government might be faced with the necessity to take back the concern, which would not have been the object in the first place.
The debate is taking place at an early stage in the Government's consideration of these matters, and I am encouraged by the fact that my hon. Friend the Minister has made it clear that he intends to listen to the debate rather than to lay down strict parameters. I should like to feel that in the end arguments which have been advanced extremely quickly will, nevertheless, be taken into the system and considered. It is because I have that degree of confidence in the Government that I shall not be troubled about voting for them, despite my reservations.
Given the problems that everyone would admit exist in the water industry, it is remarkable that there is nothing


in the alliance motion to suggest that it has any positive solutions to offer. The motion merely tells us that on one issue the Liberal party and the SDP have managed to unite. They have been able to agree about the future of water. That might be a platform for a parish council election, but it is no platform for an election to government.

Mr. Geraint Howells: As a Welshman, I feel that it is especially appropriate that I should be called to speak in this debate, Mr. Deputy Speaker. Water has a special significance in Wales, apart from the fact that we have a great deal of rain. I understand, however, that the sun was shining in mid-Wales this afternoon.
Welsh water has long been a political issue, well before reorganisation, equalisation or privatisation were considered. The drowning of entire valleys following the construction of the Claerwen dam in Radnorshire, the Clywedog dam in Montgomeryshire and the Trywerin dam in Gwynedd and the scattering of communities to make way for dams to supply water to the cities of England aroused the strongest of emotions, and these events are still remembered and felt today.
I believe that the Government's plans to privatise the water authorities will provoke equally strong reactions in Wales and other parts of Britain. Water is a valuable natural asset, and to us on the Liberal and SDP Benches it seems utter folly to treat it as a market commodity and leave it to the mercy of the private sector, where the profit motive is, by definition, more important than the public good.
The reorganisation of the water industry by the Water Act 1973, which was introduced by a Tory Government. at least provided for some public accountability through the appointment of majority local authority nominations to the boards. Unfortunately, this public accountability has been eroded since 1983, and the Government, blinded as they are by their own ideology, are about to remove it altogether. They have given the water authorities impossible financial targets and have thus helped to force up water charges while limiting the authorities' scope for investment.
The present network of water authorities, imperfect though it is in some ways, at least provides valuable public services which no private company would feel able to afford, and in my view public health is among the most important of them. Who is to say that with privatisation there will not be some cutting of corners to please shareholders? Never mind the poor old customers who live in rural areas. Presumably there will have to be a new body —yet another quango—to ensure that certain standards are kept in maintaining the purity of our water and the efficiency of the sewerage system. When the Minister replies to the debate, it will be interesting to hear exactly what plans are being made.
There are many problems with pollution control because of the enforced low spending of the present authorities, and I greatly fear that with privatisation there will be a failure to keep the necessary high standards. We know that lower standards are already being tolerated. It

is estimated that even now about 5 million people in Britain receive drinking water that fails to meet stringent EEC public health standards.
What responsibilities will the new water companies have for flood control and conservation? I am sure that many Conservative Members are members of the Country Landowners Association, there being many landowners on the Government Benches. I read with interest an article that appeared in the Western Mail today. It reads:
Private-water chaos feared. Landowners fear Government plans to privatise the water industry could cause chaos in rural Wales.
The Country Landowners Association want statutory functions, including pollution control, water-abstraction licensing and fisheries management kept in public hands.
They fear that if the Government privatise these water authority functions, farmers and other landowners will be at the whim of profit-oriented companies.
Charges for vital farming needs, such as taking stream water, could rise and landowners guilty of water pollution might face huge costs for damages instead of the present level of fines.
Those are the views of Major George Lindsay, the chairman of the Country Landowners Association's Welsh water committee. There is widespread concern in rural areas, and this fear has been expressed by the NFU, about related charges levied in rural and urban areas. The logic of privatisation would seem to be that a company is run for the profit of its shareholders. It follows that where there is virtually a monopoly, minus any sort of state control, charges to the consumer will have to meet the aspirations of the shareholders.
As time is limited, I shall bring my remarks to a close. I say on behalf of my alliance friends that I hope that the Minister will take heed and abolish his plans to privatise the Welsh water authority and other authorities in England, which do a power of good. He should leave the Welsh water authority in the hands of those who are managing it so well. That can be said of the WWA and other authorities throughout the country.

Mr. Robin Maxwell-Hyslop: In the three and a half minutes that are available to me, I observe that I am not satisfied that the Government own the assets of which they wish to dispose. I believe that the Government are not satisfied either on that score. It seems that their intention is to nationalise the water industry before attempting to privatise it. That is what is widely believed.
Both the motion and the amendment include non sequiturs and spurious arguments. The alliance motion states that
privatisation — will have serious consequences for capital investment".
Surely that cannot be so. A monopoly for which there is no competition can borrow as much as it likes provided it can justify its costs. It can invest that capital, and pass on to the consumer the costs of so doing in increased charges. Among the problems it will not have are
serious consequences for capital investment".
The Government's amendment
welcomes the Government's proposals for the privatisation of the water authorities, which will benefit customers".
Why would it benefit customers? I can appreciate why economies will benefit shareholders, but not why they will benefit customers.
The normal way in which a business increases its profits is by persuading its customers to consume more of its


products. However, we do not want people to consume more water; nor does the Prime Minister. My right hon. Friend has recommended metering to discourage people from consuming water, as it were free of charge. The Government's amendment
welcomes the Government's proposals for the privatisation of the water authorities, which will … strengthen safeguards for the water environment".
That can be done without privatising the authorities. That is why it is a spurious argument.
I cannot agree with the alliance motion because it contains an untrue proposition. If the motion had stopped at the end of the first sentence, the alliance would have found me with it in the Division Lobby tonight. I am opposed to the Government's amendment because it welcomes privatisation. I do not believe that privatisation is in the interests of consumers. There is too great a conflict between the interests of a water company and the interests of consumers in terms of water and sewerage. Moreover, the compulsory purchase of land for further reservoirs and the digging up of roads to put in new sewers and pipes should be co-ordinated with the other public authorities if the travelling public is not to be greatly disadvantaged.

Mr. A. J. Beith: I am glad that the hon. Member for Tiverton (Mr. Maxwell-Hyslop) was able to contribute to the debate. His personal crusade on the issue of who owns the water authorities is an important factor in the discussion. The discussion on that point is by no means over, as the hon. Member for Copeland (Dr. Cunningham) said. We have now heard the Government's admission of their intention to nationalise water authorities before they can privatise them. The words that the Minister used earlier seemed to show that the Government must do so. I see no way that the Government can simply dispose of assets which are not vested in the Minister without what is in effect, however compressed, a two-stage process — one by which the Government acquire assets which are vested in water authorities and one by which they hand over those assets to newly constituted private water companies. How that will be done will occupy further discussion. I shall return to the implications in a moment.
We could have done with a longer debate so that many of the arguments could have been extended and developed. It would have been interesting to hear more from the hon. Member for Teignbridge (Mr. Nicholls) on the reservations that he shares with the alliance on many aspects of the proposals. He placed some emphasis on the impossibility of generating competition, which in other industries has been an argument for privatisation, in the water industry. I welcome what he said. I suspect that before the end of these discussions, he will be in the same Division Lobby as the alliance, even if he does not go all the way tonight.
My hon. Friends the Members for Stockton, South (Mr. Wrigglesworth) and Ceredigion and Pembroke, North (Mr. Howells) underlined, from our point of view, the many failings of the Government's proposals. The hon. Member for Copeland gave clear Labour support for our motion and referred to a wide variety of organisations, which do not normally support either the Labour party or the alliance, which have strong reservations about the proposals.
The hon. Member for Normanton (Mr. O'Brien) stressed, rightly, that the argument is not just about water supply. The key environmental functions of sewage disposal and the provision of drainage and sewerage systems are, in a sense, far greater problems in the water industry than the supply of water, which has been reduced to a relatively simple operation by the activities of various sections of the water industry over the years. The largest problems will arise in environmental protection.
The hon. Member for Harrow, West (Sir J. Page) spoke about the existing private water companies and his connection with them. I shall say more about that in the course of my comments on the Minister's remarks. Why did it fall to a wet to set out the Government's proposals on water policy? The Minister did so with a striking lack of conviction. Many alliance Members were genuinely convinced, by the end of his speech, that he was not convinced by the Government proposals he advanced. Perhaps we do him a disservice by saying so, but I think that everyone on this side of the House felt that he did not show any real conviction for the cause he sought to advance because of the obvious weaknesses of it. As he set up arguments one by one, they were knocked down.
The Minister argued that it was necessary to privatise the water industry to give it access to capital from the market and access to investment other than that provided by the Government from the public sector borrowing requirement. The Minister knows that that is nonsense. It needs only a mere stroke of an accountant's pen to decide whether a water authority's investment shall be reckoned for public sector borrowing purposes. He knows full well that there are institutions nominally in the public sector which have the freedom to go to the market for capital investment, and there are institutions which have not.
It was quite open to the Government to make the decision to give the authorities freedom to go to the market for their finance. The hon. Member for Eastbourne (Mr. Gow), who spoke strongly in favour of the Government's proposals, could have done so himself when he was Minister. He did not need to come to the House to announce the privatisation of the authorities. He could have given them the freedom to go to the markets for their capital.
Then the Minister chose, extraordinarily, to attack me and my right hon. and hon. Friends over the existing private water companies. In 1977–78, we were involved in preventing the then Labour Government from nationalising those companies, as they were intent on doing. I remember the meetings vividly. My hon. Friend the Member for Rochdale (Mr. Smith) will remember them well. My hon. Friend the Member for Isle of Wight (Mr. Ross) was closely involved. We were determined that the efficient operating water companies should not be nationalised.
The Minister sought to draw from that the conclusion that that was a model for the operation of the entire water industry. The private water companies, most of which have done a good job over many years, are quite unlike the monsters that the Government seek to create. Since the current legislation has been on the statute book, the statutory water companies have been effectively accountable to the water authorities for what they do. In a sense, they are the franchised concerns like those which the Minister sought to advance as the model when he cited France. We are not reluctant to do what is done abroad. France has adopted proportional representation in its


electoral system. There is no need to look to the alliance Benches for any reluctance to follow the example of good things done in other countries.
As has been pointed out, private water companies have limited dividends. There is a dividend restraint on them which requires them to return to their consumers the benefit of the efficiency which they generate in their activities. That they do. I pay tribute to what a number of companies do. Furthermore, the companies only supply water. They do not have any of the other environmental or regulatory functions, such as fisheries management, amenities, and others specified in the motion. It is when one extends over such a wide area that one comes to an issue of public accountability.
The problem is not primarily one of ownership, although ownership is an aspect of it. It is primarily an issue of public accountability—how important public services are controlled and regulated. The Government, by singling out the issue of ownership and seeking to transfer ownership so massively, have thrown the baby out with the bath water. They have excluded the regulations of a monopoly activity, which closely concerns every aspect of the life of every citizen of this country, from effective public accountability.
It is interesting that no Minister representing Scottish interests is on the Government Front Bench. That is because the Government do not propose to take such a step in Scotland. It is interesting to speculate why. I suspect that one of the reasons is that the Government never managed to complete stage one of the process in Scotland. They never managed to get the local authorities out of democratic community control. They never managed to get the water and sewerage system out of local community control in Scotland, where it is still controlled by elected local authorities. The intermediate step has been taken in England with the creating of the halfway house of bodies with some public accountability but not democratic control. That is why we opposed their creation and have pledged constantly to introduce regional democratic control of the water system and of the functions now carried out by the regional water authorities. That already exists in Scotland. Therefore, the Government do not have that halfway status from which to move to privatisation.
I wonder why the Government are pressing ahead with this privatisation. There was a rather similar hint in what the hon. Member for Eastbourne said that the attractions of creating directorships of water authorities which Members of Parliament could take was part of the privatisation process. I hope that that was a jest and that it does not enter into the Government's motives. If the Government showed the same zeal in securing through their friends the appointment to water companies of people of their choice as they have done with the water authorities, every water company would be dominated by Conservatives. A great deal of political influence has been brought to bear in appointments to water authorities. There may be many ex-Conservative Members of Parliament seeking such posts after the next election.
The proposal is not about that. It is about feeding the meter of privatisation which the Government have set ticking away. They have made the national budget dependent on constant acts of privatisation, to such an

extent that one wonders what they will do next. With a budget of £3 billion or £4 billion a year dependent on privatisation, what will be next? What industries are left?
Will the Government be turning next to the Church of England so as to privatise it and to distribute some shares?. Might they not privatise the official Opposition? That is a wonderful opportunity. It provides the scope to break the monopoly arrangements and to allow the free market in alternative Governments to operate, instead of sustaining arrangements by which large distorting public subsidies go to one of the parties.
The Government are on an endless treadmill, privatising industries to balance the books. That is what is happening with the water industry. In one sense, one can argue that the Government's plans are a shambles, because they cannot privatise the water industry at one go. Perhaps, by privatising two or three companies a year, they see the means of keeping up the flow of money to balance the books, using the sale of assets to finance current expenditure—the most basic accounting mistake one can possibly make. That is what is involved in privatisation of the water industry.
The consumer and the general citizen will suffer. It is wrong to suggest, as did the hon. Member for Tiverton (Mr. Maxwell-Hyslop), that the issue of capital investment is a non-sequitur. Capital investment is the crucial issue in the water industry's future. It will be a matter of consumers in the country asking why their village will not be connected to the main sewerage system, consumers in the city asking why their sewers are collapsing, and consumers in resorts asking why their resort is not being singled out for removal of coastal pollution. Those everyday questions of capital investment are the essence of public accountability in the water industry.
One cannot set up any type of Oftel or "Ofwater" institution that can reasonably engage in making the water industry accountable without getting it involved day to day in what are basically public decisions about where priorities lie. That body will have to be involved not only in capital investment decisions but in prying into many other issues of environmental management and leisure and amenity management. It must be involved in issues raised by, for example, the anglers as to how much money they will have to pay for the facilities for which the water authorities are responsible. The new privatised water companies will be involved in sea fisheries management. They will have the power to decide who can fish for salmon in the North sea off the English coast which, as some Conservative Members know, is a controversial issue. The hon. Member for Reading, West (Mr. Durant), who is the Government Whip in the Committee on the Salmon Bill, is well aware of the number of days spent discussing who should fish for salmon. In future, a commercial company will decide who has the right to put to sea, how effectively the rules are enforced, and the amount of conservation.
It will be the same for someone who wants to take a boat out on some canals, which are part of the water system. It will be the same for those involved in those river navigations which are controlled at present by the water authorities. Many aspects in which public accountability is involved will be handed over lock, stock and barrel to private companies, the primary interest of which must be the payment of dividends to their shareholders, and which will not be under the restraints of the existing private water companies.
The Government in the White Paper and in what they have said so far have given no reassurances to all those people involved in any of those activities, least of all the consumer of water and the ordinary user of the basic services, that their interests will be protected. In all the discussions on this subject the Government have simply failed to grasp the public mood. They have failed to recognise that environmental control and pollution control are major political issues about which many people care deeply. Because people care so deeply, these proposals will be a millstone around the Conservative party's neck between now and the next general election.

Mr. John Patten: This has been an interesting and worthwhile debate. We shall, of course, take note of all the points that have been made. We intend to listen, as my hon. Friend the Member for Teignbridge (Mr. Nicholis) said in his excellent speech, to constructive questions and criticism. We note the views that were put forward by my hon. Friend the Member for Eastbourne (Mr. Gow) on the demands and needs of people for a wider spread of ownership and the much wider dissemination of ownership. My hon. Friend's emphasis on that theme was quite right.
I listened carefully for any mention by a Labour Member of the future position of the statutory water companies. The hon. Members for Berwick-upon-Tweed (Mr. Beith) and for Southwark and Bermondsey (Mr. Hughes) made clear the Liberal party's attitude to the statutory water companies. We do not know what the Labour party's attitude is. I ask the hon. Member for Copeland (Dr. Cunningham) to make known as soon as possible—not now, because of the shortage of time—the Labour party's attitude to the statutory water companies.

Dr. Cunningham: indicated assent.

Mr. Patten: It would be wrong for the hon. Gentleman not to make clear the Labour party's policy. I note that he has indicated assent, but I shall continue to ask him for more straightforward and spoken assent.
Hon. Members, including the hon. Member for Copeland and my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop), were concerned about ownership. I was pleased to give way a number of times to my hon. Friend, just as I was pleased to give way, as Ministers should do, to as many other hon. Members as possible. I hope that the hon. Member for Stockton, South (Mr. Wrigglesworth) does not expect Ministers not to give way as often as they are asked to do so.
In answering my hon. Friend the Member for Tiverton on the issue of ownership, I shall use more or less the same words as I used earlier. The Water Act 1973 created the water authorities. Water authorities are public corporations which are answerable to the Government. That was not denied by any hon. Member when I offered hon. Members the opportunity to do so. The water authorities are clearly in the public sector. If they are in the public sector, it is for Parliament to decide what is to happen to them. Subject to parliamentary approval, any future Bill will transfer the water authorities' assets, rights and liabilities to wholly owned Crown companies— I hope that that answers the point made by the hon. Member for Berwick-upon-'Tweed; I have made it before—and will empower the Secretary of State to sell them at his or her pleasure at the correct time.
It was a little unfair of the hon. Member for Copeland to talk about lack of investment by the Government in the water industry, especially when he used the phoney figures produced by the Chartered Institute of Public Finance and Accountancy. The institute should know that the retail price index is not a suitable index for investment. Indices of capital expenditure prices move differently from the RPI. The institute should have chosen a more useful and valid index, because it would have produced the fact that, since 1980, investment in water by the Government has increased by 30 per cent. in real terms, which is a considerable achievement. We shall have no lectures from the Labour party or any other party about underinvestment in the water authorities. Care and consideration for the water authorities before privatisation will certainly be continued by us.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 183, Noes 253.

Division No. 229]
[7 pm


AYES


Abse, Leo
Eastham, Ken


Adams, Allen (Paisley N)
Edwards, Bob (W'h'mpt'n SE)


Alton, David
Evans, John (St. Helens N)


Archer, Rt Hon Peter
Fatchett, Derek


Ashdown, Paddy
Faulds, Andrew


Ashley, Rt Hon Jack
Field, Frank (Birkenhead)


Ashton, Joe
Fields, T. (L'pool Broad Gn)


Atkinson, N. (Tottenham)
Fisher, Mark


Bagier, Gordon A. T.
Flannery, Martin


Banks, T1ony (Newham NW)
Foot, Rt Hon Michael


Barnett, Guy
Forrester, John


Barron, Kevin
Foster, Derek


Beckett, Mrs Margaret
Fraser, J. (Norwood)


Beith, A. J.
Freeson, Rt Hon Reginald


Benn, Rt Hon Tony
Freud, Clement


Bennett, A. (Dent'n &amp; Red'sh)
Garrett, W. E.


Bermingham, Gerald
George, Bruce


Bidwell, Sydney
Gilbert, Rt Hon Dr John


Blair, Anthony
Gould, Bryan


Boothroyd, Miss Betty
Gourlay, Harry


Boyes, Roland
Hancock, Michael


Bray, Dr Jeremy
Hardy, Peter


Brown, Gordon (D'f'mline E)
Harman, Ms Harriet


Brown, N. (N'c'tle-u-Tyne E)
Harrison, Rt Hon Walter


Brown, Ron (E'burgh, Leith)
Hattersley, Rt Hon Roy


Bruce, Malcolm
Heffer, Eric S.


Buchan, Norman
Hogg, N. (C'nauld &amp; Kilsyth)


Callaghan, Jim (Heyw'd &amp; M)
Home Robertson, John


Campbell, Ian
Howells, Geraint


Carlile, Alexander (Montg'y)
Hoyle, Douglas


Carter-Jones, Lewis
Hughes, Robert (Aberdeen N)


Clark, Dr David (S Shields)
Hughes, Roy (Newport East)


Clarke, Thomas
Hughes, Simon (Southwark)


Clay, Robert
Janner, Hon Greville


Clelland, David Gordon
Jenkins, Rt Hon Roy (Hillh'd)


Clwyd, Mrs Ann
John, Brynmor


Cocks, Rt Hon M. (Bristol S)
Johnston, Sir Russell


Cohen, Harry
Jones, Barry (Alyn &amp; Deeside)


Conlan, Bernard
Kaufman, Rt Hon Gerald


Corbett, Robin
Kilroy-Silk, Robert


Cox, Thomas (Tooting)
Kinnock, Rt Hon Neil


Craigen, J. M.
Kirkwood, Archy


Crowther, Stan
Leadbitter, Ted


Cunliffe, Lawrence
Leighton, Ronald


Cunningham, Dr John
Lewis, Ron (Carlisle)


Davies, Rt Hon Denzil (L'lli)
Lewis, Terence (Worsley)


Davies, Ronald (Caerphilly)
Litherland, Robert


Davis, Terry (B'ham, H'ge H'I)
Lloyd, Tony (Stretford)


Deakins, Eric
Lofthouse, Geoffrey


Dewar, Donald
Loyden, Edward


Dormand, Jack
McCartney, Hugh


Douglas, Dick
McDonald, Dr Oonagh


Duffy, A. E. P.
McGuire, Michael


Eadie, Alex
McKelvey, William






MacKenzie, Rt Hon Gregor
Robinson, G. (Coventry NW)


Maclennan, Robert
Rowlands, Ted


McNamara, Kevin
Ryman, John


McTaggart, Robert
Sedgemore, Brian


McWilliam, John
Sheerman, Barry


Madden, Max
Sheldon, Rt Hon R.


Marek, Dr John
Shields, Mrs Elizabeth


Marshall, David (Shettleston)
Shore, Rt Hon Peter


Martin, Michael
Short, Ms Clare (Ladywood)


Mason, Rt Hon Roy
Silkin, Rt Hon J.


Maxton, John
Skinner, Dennis


Maynard, Miss Joan
Smith, C.(Isl'ton S &amp; F'bury)


Meacher, Michael
Smith, Cyril (Rochdale)


Meadowcroft, Michael
Snape, Peter


Michie, William
Soley, Clive


Millan, Rt Hon Bruce
Spearing, Nigel


Miller, Dr M. S. (E Kilbride)
Stott, Roger


Morris, Rt Hon A. (W'shawe)
Strang, Gavin


Morris, Rt Hon J. (Aberavon)
Straw, Jack


Nellist, David
Thomas, Dafydd (Merioneth)


O'Brien, William
Thomas, Dr R. (Carmarthen)


O'Neill, Martin
Thompson, J (Wansbeck)


Orme, Rt Hon Stanley
Thorne, Stan (Preston)


Owen, Rt Hon Dr David
Torney, Tom


Park, George
Wainwright, R.


Parry, Robert
Wallace, James


Patchett, Terry
Wareing, Robert


Pavitt, Laurie
Weetch, Ken


Penhaligon, David
Welsh, Michael


Pike, Peter
White, James


Powell, Raymond (Ogmore)
Wigley, Dafydd


Prescott, John
Williams, Rt Hon A.


Radice, Giles
Winnick, David


Randall, Stuart
Woodall, Alec


Raynsford, Nick
Young, David (Bolton SE)


Rees, Rt Hon M. (Leeds S)



Richardson, Ms Jo
Tellers for the Ayes:


Roberts, Allan (Bootle)
Mr. Richard Livsey and


Roberts, Ernest (Hackney N)
Mr. Ian Wrigglesworth.


Robertson, George



NOES


Adley, Robert
Bulmer, Esmond


Aitken, Jonathan
Burt, Alistair


Alexander, Richard
Butcher, John


Alison, Rt Hon Michael
Butler, Rt Hon Sir Adam


Ancram, Michael
Carlisle, John (Luton N)


Arnold, Tom
Carlisle, Kenneth (Lincoln)


Ashby, David
Carlisle, Rt Hon M. (Wton S)


Atkins, Rt Hon Sir H.
Carttiss, Michael


Atkins, Robert (South Ribble)
Cash, William


Baker, Rt Hon K. (Mole Vall'y)
Chalker, Mrs Lynda


Baker, Nicholas (Dorset N)
Chapman, Sydney


Baldry, Tony
Chope, Christopher


Banks, Robert (Harrogate)
Churchill, W. S.


Batiste, Spencer
Clark, Dr Michael (Rochlord)


Beaumont-Dark, Anthony
Clark, Sir W. (Croydon S)


Bellingham, Henry
Clarke, Rt Hon K. (Rushcliffe)


Bendall, Vivian
Clegg, Sir Walter


Benyon, William
Cockeram, Eric


Biffen, Rt Hon John
Colvin, Michael


Biggs-Davison, Sir John
Conway, Derek


Blackburn, John
Coombs, Simon


Blaker, Rt Hon Sir Peter
Cope, John


Bonsor, Sir Nicholas
Corrie, John


Boscawen, Hon Robert
Couchman, James


Bottomley, Peter
Cranborne, Viscount


Bottomley, Mrs Virginia
Currie, Mrs Edwina


Bowden, A. (Brighton K'to'n)
Dickens, Geoffrey


Bowden, Gerald (Dulwich)
Dicks, Terry


Boyson, Dr Rhodes
Dorrell, Stephen


Braine, Rt Hon Sir Bernard
Douglas-Hamilton, Lord J.


Bright, Graham
Dover, Den


Brinton, Tim
du Cann, Rt Hon Sir Edward


Brown, M. (Brigg &amp; Cl'thpes)
Dykes, Hugh


Bruinvels, Peter
Edwards, Rt Hon N. (P'broke)


Bryan, Sir Paul
Eggar, Tim


Buchanan-Smith, Rt Hon A.
Emery, Sir Peter


Buck, Sir Antony
Evennett, David


Budgen, Nick
Eyre, Sir Reginald





Fallon, Michael
Nelson, Anthony


Farr, Sir John
Neubert, Michael


Fenner, Mrs Peggy
Newton, Tony


Fletcher, Alexander
Nicholls, Patrick


Fookes, Miss Janet
Norris, Steven


Forman, Nigel
Onslow, Cranley


Forth, Eric
Oppenheim, Phillip


Fowler, Rt Hon Norman
Oppenheim, Rt Hon Mrs S.


Fox, Sir Marcus
Ottaway, Richard


Fraser, Peter (Angus East)
Page, Sir John (Harrow W)


Gardiner, George (Reigate)
Page, Richard (Herts SW)


Garel-Jones, Tristan
Patten, Christopher (Bath)


Gorst, John
Patten, J. (Oxf W &amp; Abgdn)


Gow, Ian
Pattie, Geoffrey


Gower, Sir Raymond
Pawsey, James


Grant, Sir Anthony
Percival, Rt Hon Sir Ian


Greenway, Harry
Porter, Barry


Griffiths, Sir Eldon
Portillo, Michael


Ground, Patrick
Powell, William (Corby)


Hanley, Jeremy
Powley, John


Hawkins, Sir Paul (N'folk SW)
Prentice, Rt Hon Reg


Heddle, John
Price, Sir David


Higgins, Rt Hon Terence L.
Proctor, K. Harvey


Hill, James
Raffan, Keith


Hind, Kenneth
Raison, Rt Hon Timothy


Hogg, Hon Douglas (Gr'th'm)
Rathbone, Tim


Holland, Sir Philip (Gedling)
Rees, Rt Hon Peter (Dover)


Hordern, Sir Peter
Rhodes James, Robert


Howarth, Gerald (Cannock)
Ridley, Rt Hon Nicholas


Howell, Rt Hon D. (G'ldford)
Ridsdale, Sir Julian


Hunter, Andrew
Rippon, Rt Hon Geoffrey


Jackson, Robert
Roberts, Wyn (Conwy)


Jessel, Toby
Robinson, Mark (N'port W)


Joseph, Rt Hon Sir Keith
Rossi, Sir Hugh


Kershaw, Sir Anthony
Rost, Peter


Key, Robert
Rowe, Andrew


Knowles, Michael
Rumbold, Mrs Angela


Lang, Ian
Ryder, Richard


Latham, Michael
Sackville, Hon Thomas


Lawrence, Ivan
Sainsbury, Hon Timothy


Leigh, Edward (Gainsbor'gh)
Shelton, William (Streatham)


Lennox-Boyd, Hon Mark
Shepherd, Richard (Aldridge)


Lester, Jim
Shersby, Michael


Lewis, Sir Kenneth (Stamf'd)
Silvester, Fred


Lilley, Peter
Sims, Roger


Lloyd, Sir Ian (Havant)
Skeet, Sir Trevor


Lloyd, Peter (Fareham)
Smith, Sir Dudley (Warwick)


Lord, Michael
Smith, Tim (Beaconsfield)


Luce, Rt Hon Richard
Speed, Keith


Lyell, Nicholas
Speller, Tony


McCrindle, Robert
Spencer, Derek


McCurley, Mrs Anna
Spicer, Jim (Dorset W)


Macfarlane, Neil
Squire, Robin


MacGregor, Rt Hon John
Stanbrook, Ivor


Madel, David
Steen, Anthony


Major, John
Stern, Michael


Malins, Humfrey
Stevens, Lewis (Nuneaton)


Malone, Gerald
Stewart, Allan (Eastwood)


Maples, John
Stewart, Andrew (Sherwood)


Marland, Paul
Sumberg, David


Marlow, Antony
Taylor, John (Solihull)


Marshall, Michael (Arundel)
Taylor, Teddy (S'end E)


Mates, Michael
Temple-Morris, Peter


Maude, Hon Francis
Terlezki, Stefan


Mayhew, Sir Patrick
Thomas, Rt Hon Peter


Mellor, David
Thompson, Donald (Calder V)


Miller, Hal (B'grove)
Thompson, Patrick (N'ich N)


Mills, Iain (Meriden)
Thorne, Neil (llford S)


Mills, Sir Peter (West Devon)
Thornton, Malcolm


Miscampbell, Norman
Townend, John (Bridlington)


Mitchell, David (Hants NW)
Townsend, Cyril D. (B'heath)


Moate, Roger
Tracey, Richard


Montgomery, Sir Fergus
Trippier, David


Morris, M. (N'hampton S)
Twinn, Dr Ian


Morrison, Hon P. (Chester)
van Straubenzee, Sir W.


Moynihan, Hon C.
Vaughan, Sir Gerard


Mudd, David
Viggers, Peter


Murphy, Christopher
Waddington, David


Neale, Gerrard
Waldegrave, Hon William


Needham, Richard
Walker, Bill (Tside N)






Wall, Sir Patrick
Wilkinson, John


Waller, Gary
Winterton, Mrs Ann


Walters, Dennis
Winterton, Nicholas


Wardle, C. (Bexhill)
Wood, Timothy


Warren, Kenneth
Yeo, Tim


Watson, John
Young, Sir George (Acton)


Watts, John



Wells, Bowen (Hertford)
Tellers for the Noes:


Wells, Sir John (Maidstone)
Mr. Tony Duranl and


Whitney, Raymond
Mr. Archie Hamilton.


Wiggin, Jerry

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments):—

The House divided: Ayes 242, Noes 167.

Division No. 230]
[7.15 pm


AYES


Adley, Robert
Corrie, John


Aitken, Jonathan
Couchman, James


Alexander, Richard
Currie, Mrs Edwina


Alison, Rt Hon Michael
Dickens, Geoffrey


Ancram, Michael
Dicks, Terry


Arnold, Tom
Dorrell, Stephen


Ashby, David
Douglas-Hamilton, Lord J.


Atkins, Rt Hon Sir H.
Dover, Den


Atkins, Robert (South Ribble)
du Cann, Rt Hon Sir Edward


Baker, Rt Hon K. (Mole Vall'y)
Durant, Tony


Baker, Nicholas (Dorset N)
Dykes, Hugh


Baldry, Tony
Edwards, Rt Hon N. (P'broke)


Banks, Robert (Harrogate)
Eggar, Tim


Batiste, Spencer
Emery, Sir Peter


Beaumont-Dark, Anthony
Evennett, David


Bellingham, Henry
Eyre, Sir Reginald


Bendall, Vivian
Fallon, Michael


Benyon, William
Farr, Sir John


Biffen, Rt Hon John
Fenner, Mrs Peggy


Biggs-Davison, Sir John
Fletcher, Alexander


Blackburn, John
Fookes, Miss Janet


Blaker, Rt Hon Sir Peter
Forman, Nigel


Bonsor, Sir Nicholas
Fowler, Rt Hon Norman


Boscawen, Hon Robert
Fox, Sir Marcus


Bottomley, Peter
Fraser, Peter (Angus East)


Bottomley, Mrs Virginia
Gardiner, George (Reigate)


Bowden, A. (Brighton K'to'n)
Garel-Jones, Tristan


Boyson, Dr Rhodes
Gorst, John


Braine, Rt Hon Sir Bernard
Gow, Ian


Bright, Graham
Gower, Sir Raymond


Brinton, Tim
Grant, Sir Anthony


Brown, M. (Brigg &amp; Cl'thpes)
Greenway, Harry


Bruinvels, Peter
Griffiths, Sir Eldon


Bryan, Sir Paul
Hamilton, Hon A. (Epsom)


Buchanan-Smith, Rt Hon A.
Hanley, Jeremy


Buck, Sir Antony
Hawkins, Sir Paul (N'folk SW)


Budgen, Nick
Heddle, John


Bulmer, Esmond
Higgins, Rt Hon Terence L.


Burt, Alistair
Hill, James


Butcher, John
Hind, Kenneth


Butler, Rt Hon Sir Adam
Hogg, Hon Douglas (Gr'th'm)


Carlisle, John (Luton N)
Holland, Sir Philip (Gedling)


Carlisle, Kenneth (Lincoln)
Howarth, Gerald (Cannock)


Carlisle, Rt Hon M. (W'ton S)
Howell, Rt Hon D. (G'ldford)


Carttiss, Michael
Howell, Ralph (Norfolk, N)


Cash, William
Hunter, Andrew


Chalker, Mrs Lynda
Jackson, Robert


Chapman, Sydney
Jessel, Toby


Chope, Christopher
Joseph, Rt Hon Sir Keith


Churchill, W. S.
Kershaw, Sir Anthony


Clark, Dr Michael (Rochford)
Key, Robert


Clark, Sir W. (Croydon S)
Knowles, Michael


Clegg, Sir Walter
Lang, Ian


Cockeram, Eric
Latham, Michael


Colvin, Michael
Lawrence, Ivan


Conway, Derek
Lee, John (Pendle)


Coombs, Simon
Leigh, Edward (Gainsbor'gh)


Cope, John
Lester, Jim





Lewis, Sir Kenneth (Stamf'd)
Roberts, Wyn (Conwy)


Lilley, Peter
Robinson, P. (Belfast E)


Lloyd, Sir Ian (Havant)
Rossi, Sir Hugh


Lloyd, Peter (Fareham)
Rost, Peter


Lord, Michael
Rowe, Andrew


Luce, Rt Hon Richard
Rumbold, Mrs Angela


Lyell, Nicholas
Ryder, Richard


McCrindle, Robert
Sackville, Hon Thomas


McCurley, Mrs Anna
Shelton, William (Streatham)


Macfarlane, Neil
Shepherd, Richard (Aldridge)


MacGregor, Rt Hon John
Shersby, Michael


Madel, David
Silvester, Fred


Major, John
Sims, Roger


Malins, Humfrey
Skeet, Sir Trevor


Malone, Gerald
Smith, Sir Dudley (Warwick)


Maples, John
Smith, Tim (Beaconsfield)


Marland, Paul
Speller, Tony


Marlow, Antony
Spencer, Derek


Marshall, Michael (Arundel)
Spicer, Jim (Dorset W)


Mates, Michael
Squire, Robin


Maude, Hon Francis
Stanbrook, Ivor


Mayhew, Sir Patrick
Steen, Anthony


Mills, Iain (Meriden)
Stern, Michael


Mills, Sir Peter (West Devon)
Stevens, Lewis (Nuneaton)


Miscampbell, Norman
Stewart, Allan (Eastwood)


Mitchell, David (Hants NW)
Stewart, Andrew (Sherwood)


Moate, Roger
Sumberg, David


Montgomery, Sir Fergus
Taylor, John (Solihull)


Morris, M. (N'hampton S)
Taylor, Teddy (S'end E)


Morrison, Hon P. (Chester)
Temple-Morris, Peter


Moynihan, Hon C.
Terlezki, Stefan


Mudd, David
Thomas, Rt Hon Peter


Murphy, Christopher
Thompson, Donald (Calder V)


Neale, Gerrard
Thompson, Patrick (N'ich N)


Needham, Richard
Thorne, Neil (Ilford S)


Nelson, Anthony
Thornton, Malcolm


Neubert, Michael
Townend, John (Bridlington)


Newton, Tony
Townsend, Cyril D. (B'heath)


Nicholls, Patrick
Tracey, Richard


Norris, Steven
Trippier, David


Onslow, Cranley
Twinn, Dr Ian


Oppenheim, Phillip
van Straubenzee, Sir W.


Oppenheim, Rt Hon Mrs S.
Vaughan, Sir Gerard


Ottaway, Richard
Viggers, Peter


Page, Sir John (Harrow W)
Waddington, David


Page, Richard (Herts SW)
Waldegrave, Hon William


Patten, Christopher (Bath)
Walker, Bill (T'side N)


Patten, J. (Oxf W &amp; Abgdn)
Wall, Sir Patrick


Pattie, Geoffrey
Waller, Gary


Pawsey, James
Wardle, C. (Bexhill)


Percival, Rt Hon Sir Ian
Warren, Kenneth


Porter, Barry
Watson, John


Portillo, Michael
Watts, John


Powell, William (Corby)
Wells, Sir John (Maidstone)


Powley, John
Whitney, Raymond


Price, Sir David
Wilkinson, John


Proctor, K. Harvey
Winterton, Mrs Ann


Raffan, Keith
Winterton, Nicholas


Raison, Rt Hon Timothy
Wood, Timothy


Rathbone, Tim
Yeo, Tim


Rees, Rt Hon Peter (Dover)
Young, Sir George (Acton)


Rhodes James, Robert



Ridley, Rt Hon Nicholas
Tellers for the Ayes:


Ridsdale, Sir Julian
Mr. Tim Sainsbury and


Rippon, Rt Hon Geoffrey
Mr. Mark Lennox-Boyd.


NOES


Abse, Leo
Bidwell, Sydney


Adams, Allen (Paisley N)
Boyes, Roland


Alton, David
Bray, Dr Jeremy


Ashdown, Paddy
Brown, Gordon (D'f'mline E)


Ashley, Rt Hon Jack
Brown, N. (N'c'tle-u-Tyne E)


Atkinson, N. (Tottenham)
Brown, Ron (E'burgh, Leith)


Banks, Tony (Newham NW)
Bruce, Malcolm


Barnett, Guy
Buchan, Norman


Barron, Kevin
Callaghan, Jim (Heyw'd S M)


Beckett, Mrs Margaret
Carlile, Alexander (Montg'y)


Beith, A. J.
Carter-Jones, Lewis


Bennett, A. (Dent'n &amp; Red'sh)
Clark, Dr David (S Shields)


Bermingham, Gerald
Clarke, Thomas






Clay, Robert
Harman, Ms Harriet


Clelland, David Gordon
Harrison, Rt Hon Walter


Clwyd, Mrs Ann
Heffer, Eric S.


Cocks, Rt Hon M. (Bristol S)
Hogg, N. (C'nauld &amp; Kilsyth)


Cohen, Harry
Home Robertson, John


Conlan, Bernard
Howells, Geraint


Corbett, Robin
Hoyle, Douglas


Cox, Thomas (Tooting)
Hughes, Roy (Newport East)


Craigen, J. M.
Hughes, Simon (Southwark)


Crowther, Stan
Janner, Hon Greville


Cunliffe, Lawrence
Jenkins, Rt Hon Roy (Hillh'd)


Cunningham, Dr John
John, Brynmor


Davies, Rt Hon Denzil (L'lli)
Johnston, Sir Russell


Davies, Ronald (Caerphilly)
Jones, Barry (Alyn &amp; Deeside)


Davis, Terry (B'ham, H'ge H'I)
Kaufman, Rt Hon Gerald


Deakins, Eric
Kinnock, Rt Hon Neil


Dewar, Donald
Kirkwood, Archy


Dormand, Jack
Leadbitter, Ted


Douglas, Dick
Leighton, Ronald


Duffy, A. E. P.
Lewis, Ron (Carlisle)


Eadie, Alex
Lewis, Terence (Worsley)


Eastham, Ken
Litherland, Robert


Edwards, Bob (W'h'mpt'n SE)
Livsey, Richard


Evans, John (St. Helens N)
Lloyd, Tony (Stretford)


Fatchett, Derek
Lofthouse, Geoffrey


Faulds, Andrew
Loyden, Edward


Field, Frank (Birkenhead)
McCartney, Hugh


Fields, T. (L'pool Broad Gn)
McGuire, Michael


Fisher, Mark
McKelvey, William


Flannery, Martin
MacKenzie, Rt Hon Gregor


Foot, Rt Hon Michael
Maclennan, Robert


Forrester, John
McNamara, Kevin


Foster, Derek
McTaggart, Robert


Fraser, J. (Norwood)
McWilliam, John


Freeson, Rt Hon Reginald
Madden, Max


Freud, Clement
Marek, Dr John


Garrett, W. E.
Marshall, David (Shettleston)


George, Bruce
Martin, Michael


Gilbert, Rt Hon Dr John
Mason, Rt Hon Roy


Golding, John
Maxton, John


Gourlay, Harry
Maxwell-Hyslop, Robin


Hancock, Michael
Maynard, Miss Joan


Hardy, Peter
Meacher, Michael





Meadowcroft, Michael
Silkin, Rt Hon J.


Michie, William
Skinner, Dennis


Millan, Rt Hon Bruce
Smith, C.(lsl'ton S &amp; F'bury)


Miller, Dr M. S. (E Kilbride)
Smith, Cyril (Rochdale)


Morris, Rt Hon A. (W'shawe)
Snape, Peter


O'Brien, William
Soley, Clive


O'Neill, Martin
Spearing, Nigel


Orme, Rt Hon Stanley
Stott, Roger


Owen, Rt Hon Dr David
Strang, Gavin


Park, George
Straw, Jack


Parry, Robert
Thomas, Dafydd (Merioneth)


Patchett, Terry
Thomas, Dr R. (Carmarthen)


Penhaligon, David
Thompson, J. (Wansbeck)


Pike, Peter
Thorne, Stan (Preston)


Powell, Raymond (Ogmore)
Torney, Tom


Prescott, John
Wainwright, R.


Radice, Giles
Wallace, James


Randall, Stuart
Wareing, Robert


Raynsford, Nick
Weetch, Ken


Rees, Rt Hon M. (Leeds S)
Welsh, Michael


Richardson, Ms Jo
Wigley, Dafydd


Roberts, Allan (Bootle)
Williams, Rt Hon A.


Robertson, George
Winnick, David


Robinson, G. (Coventry NW)
Woodall, Alec


Rowlands, Ted
Young, David (Bolton SE)


Ryman, John



Sheerman, Barry
Tellers for the Noes:


Sheldon, Rt Hon R.
Mr. Ian Wrigglesworth and


Shore, Rt Hon Peter
Mrs. Elizabeth Shields.


Short, Ms Clare (Ladywood)

Question accordingly agreed to.

MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House welcomes the Government's proposals for the privatisation of the water authorities, which will benefit customers, strengthen safeguards for the water environment, encourage enterprise, improve the efficiency of industry, reduce the public sector and extend share-ownership.

Rate Support Grant Bill

Order for Second Reading read.

The Minister for Environment, Countryside and Local Government (Mr. William Waldegrave): I beg to move, That the Bill be now read a Second time.
With the best will in the world, it is difficult to make a speech of great oratorical note about this Bill. I can think of only one person who would have done this measure justice, and that is someone whom we all miss — Mr. Cowans, the late hon. Member for Tyne Bridge. I should have liked to hear a speech from Harry Cowans on this Bill, and I was almost tempted to deliver his speech for him. It would have had a great deal to do with throttles and accelerators, and it would have been a fine speech. Unfortunately, I cannot live up to Harry's standard on this matter as, doubtless, I cannot on other matters.
The Bill results from a challenge by a number of authorities to the way in which one particular aspect of the block grant system has operated, with the broad agreement of the local authority associations, since 1981.
Under section 59 of the Local Government, Planning and Land Act 1980, the Secretary of State has power to determine block grant multipliers to limit the change in the amount of block grant payable to an authority from one year to the next. We have taken this to mean that safety nets could be set to protect local authorities against losses in any one settlement and that caps could be set on increases to prevent undesirable gains by some authorities at the expense of all other authorities. Each year since 1981, these powers have been used to limit certain factors affecting grant entitlements but not others. It would clearly be nonsense if the powers were to be used in such a way that all the factors which can change an individual authority's grant entitlement from one year to the next were caught by these nets or caps. For example, authorities would not expect to be protected from grant losses resulting from an increase in their own rateable resources, or a reduction in school age children. In particular, authorities could not expect to be protected from the grant results of their own expenditure decisions which are an integral part of the present system.
On the other hand, we have thought it right to limit losses or restrict gains arising from certain kinds of changes which are made from time to time in the system. For example, nets have been set to protect authorities from losses resulting from changes in the way that grant-related expenditure assessments are calculated. In 1986–87 caps were set for a number of authorities because we concluded it was desirable to restrict the windfall gains resulting from our decision to abolish expenditure targets. The power was also used to ensure that the grant effects of abolishing the GLC and the metropolitan county councils would be neutral at ratepayer level.
This approach has had the general support of the local authority associations. It has been embodied in the RSG reports for each of the six years since 1981, all of which were approved by this House.
As a result of a legal challenge by Birmingham city council, the court has now ruled that to use the powers in this way is ultra vires. The Secretary of State, the court has now judged, cannot separate out single factors as he has in the past. The effect is that under the Local Government, Planning and Land Act 1980, the Secretary of State is

restricted to limiting changes in the total amount of grant payable to an authority for one year compared to the previous year. I do not believe that the powers could be used in the real world in this way in a sensible fashion. The system is intended to limit the grant of those who deliberately overspend. If multipliers could limit only the change in the total amount payable to a local authority, we should also be limiting losses in grant due to that overspending. This would clearly contradict the will of the House in approving successive rate support grant settlements.

Mr. Anthony Beaumont-Dark: Believe it or not, I have considerable sympathy with the Government over the dilemma facing them. A law which the Government thought was a good law, as usual with lawyers, was written badly. The Government have a right to the law. However, does my hon. Friend understand the problems faced by cities like Birmingham when he speaks about overspending, and does he apreciate the special problems faced by Handsworth? We are likely to be caught and forced to do what the Government want. or we will be accused of overspending. Birmingham city council needs to spend a certain amount of money, and the Government are spending their share, but if Birmingham spends its share it can be penalised and lose millions of pounds simply becaue it has overspent by a few hundred thousand pounds. Will my hon. Friend accept that that makes the law—whether it is good or bad—rather odd in a compassionate and useful sense?

Mr. Waldegrave: I find it rather unnerving to have my hon. Friend's support on this matter. In the wider context of his points about urban programme spending, he has put forward an argument which he has made eloquently before, and he put forward that argument eloquently for the city of Birmingham. He stated that there are aspects of the fundamental system that he would like to see changed. However, today's debate is intended to confirm that the system, as passed by the House, should be as we thought it was. I note my hon. Friend's point, and I recognise that he would like to see more fundamental changes than it would be proper to make in the Bill.

Ms. Clare Short: According to Birmingham city council, the Government are exaggerating the effects of the court ruling. The ruling referred only to caps that had been applied in the past financial year. The Government are pretending that the ruling also referred to safety nets that applied in previous years. Birmingham council has said that that is wrong and that the wording in the old legislation on the two issues is different. I hope that the Minister will justify this wide interpretation of the court ruling.

Mr. Waldegrave: I can well understand that Birmingham, having won its point, may wish to suggest that it is a small victory relevant only to Birmingham so that we do not correct the legislation. Our advice, however, is that the ultra vires effect is wider than the hon. Lady suggests, but no doubt we shall explore this further when she has made her speech.
In addition, the practical effect of the Birmingham judgment is to cast substantial doubt on the grant entitlements of every local authority, not only for 1986–87, but for every previous year back to 1981–82. If we did not have this Bill, we should have to start by recalculating


grant entitlement for 1981 and roll the calculations forward cumulatively on the basis of the new rules for safety nets and caps until 1986–87. When I tell the House that since 1981 almost 1,500 safety nets and some 170 caps have been set, hon. Members will appreciate the enormous problems involved in disentangling precise grant entitlements for any local authority.

Mr. Terry Davis: Is the Minister saying that without the Bill the Government will have to revise calculations going back many years? How does he meet the point made by Birmingham and other authorities that it is not possible to reopen the grant settlement for previous years because of another court case in 1983?

Mr. Waldegrave: It would not be for us to reopen such settlements. They would simply be ultra vires. If the powers that the Secretary of State has been using since 1981 are ultra vires, they are ultra vires, and that is the end of the matter.

Mr. Davis: Is it not correct that a decision must be regarded as valid unless it is challenged within a reasonable period?

Mr. Waldegrave: I think that if the use of a power is declared to be ultra vires, its use is ultra vires, but I am sure that my hon. Friend the Parliamentary Under-Secretary of State, who is to wind up the debate, will be interested to hear the hon. Gentleman's speech, because we shall have to return to these points.
It is abundantly clear that if recalculations had to be made they would involve unexpected and possibly unmanageable losses of grant for a large number of authorities. The Bill therefore has two main purposes. It validates the way in which the powers to determine block grant multipliers have been used since 1981, and it sets on the statute book the precise powers necessary to ensure that the previous practice can continue for the future. The new power will enable the Secretary of State to determine multipliers for the purpose of limiting or avoiding the effect on the amount of block grant payable to a local authority for any year, or the contribution made, or to be made, by ratepayers, of any difference between that year and the previous year in any of the matters relevant to the calculation of block grant. This will enable the Secretary of State to limit the effect of particular factors, as he has been doing.
The hon. Member for Blackburn (Mr. Straw), like all good lawyers, can argue the case from every side. He argued with panache last time that there was a very good precedent for retrospective legislation, if it worried the House, in that the Labour Government had indulged in a far more dramatic piece of retrospection with the War Damage Act 1965, but I do not think that we need go that far. As my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) said when the need for legislation was announced, there is a difference in that it is legitimate to legislate in this way to implement settled expectations, but unacceptable to legislate retrospectively to defeat settled expectations. I hope, therefore, that the point about retrospection will not delay us on this occasion.

Mr. Jack Straw: I am glad that the Minister raised that point, as it anticipates part of my

speech. In the Chamber on 10 April he sought to distinguish between the Bill and the War Damage Act 1965 on the ground that the latter damaged people's rights retrospectively, whereas his proposition sought to maintain the status quo. Does he accept that Birmingham's rights are being changed retrospectively?

Mr. Waldegrave: I used the word "expectations" on this occasion, and I think that it is the better word. The moral point is that the House does not like the type of retrospection that leads to people getting something different from what they expected. Indeed, the House disliked it intensely when the Labour Government indulged in it in such spectacular fashion in 1965. That is not the situation today, but I know that my hon. Friend the Parliamentary Under-Secretary of State will be able to deploy a considerable number of examples of that type of retrospection by Labour Governments.
In addition to the main provision on multipliers, the Bill contains a small number of minor technical provisions which are either consequent upon the amendments to the powers on block grant multipliers, or where we consider it appropriate to confirm and clarify the use of other powers in the 1980 Act. I am sure that the House will agree with me that the more technical matters can be considered fully in Committee, but I should like to draw attention briefly to three of those provisions.
First, under sections 60 and 61 of the 1980 Act, RSG reports and supplementary reports are required to specify the considerations which led the Secretary of State to make all the particular determinations required by the Act. It would be totally impossible for reports to meet this requirement in respect of every determination. For example, a detailed description of the considerations underlying each of the grant-related expenditure determinations would alone require a document several times the size of the present RSG report. The Bill provides, therefore, in paragraphs 8 and 9 of the schedule, that reports will provide such explanations as the Secretary of State thinks desirable of the main features of determinations specified in the reports. I stress, however, that it is not our intention in any way to reduce the level of explanation currently provided by the RSG reports. We simply seek to confirm that the normal practice has been carried out on a proper basis and can continue unchallenged.

Mr. Simon Hughes: Does the Minister accept that one of the complaints, especially from local government officers, is that it is difficult to discover all the considerations leading to the figure produced by the Department? One way to deal with that is to make the documents and considerations known. The wording of the Bill will make it possible for much less information to be produced by the Government, thus making the life of local government staff even more difficult.

Mr. Waldegrave: Rightly or wrongly, there is now far more litigation than in the past—for the benefit of the hon. Gentleman's profession—so we have to examine all legislation to see whether there are loopholes. I do not believe that it is possible philosophically or logically to have a complete description of anything—if the hon. Gentleman thinks about it he will find that that is true —but we are advised that the wording of the existing Act allows room for the type of litigation that we fear, and


that is now more common than it used to be. I repeat, however, that it is not our intention to use the new legislation in any way to diminish the proper explanations given. I make that pledge here and now.

Mr. Straw: I accept the Minister's philosophical statement, but does he accept that in the so-called real world of rate support grant the phrase
as the Secretary of State thinks desirable
in paragraph 8 of the schedule leaves a wholly subjective power in the hands of the Secretary of State? If the Minister means what he says about the way in which the legislation will be used, will he give an undertaking to consider favourably amendments in Committee seeking to amend that wording— for example, by substituting the words "as are reasonably necessary"?

Mr. Waldegrave: We are moving rather rapidly to Committee points. I cannot give a pledge now to accept detailed amendments in Committee, but I am sure I can pledge that any amendments put forward will be seriously considered at that stage.
Second—the hon. Member for Blackburn should like this — paragraph 10 of the schedule introduces a restriction on the Secretary of State's powers to redetermine block grant multipliers determined at the time of a rate support grant settlement. The present provisions of the 1980 Act give the Secretary of State discretion to redetermine all multipliers in a supplementary report in the light of later expenditure information which was not available at the time of the settlement, although the Secretary of State has never used the power in this way for net and cap multipliers. Had we done so, the result would have been, yet again, a completely unacceptable degree of uncertainty for local authorities as to their grant entitlements.
Local authorities will have set their rates in the light of their entitlements for the main RSG report. Accordingly, we thought it right to limit the Secretary of State's power to redetermine net and cap multipliers so that he may do so only when there has been an error in the application of the principles to the original determination on the basis of the information then available.
Thirdly, and finally, I come to the provisions in the schedule relating to the returns of expenditure information to the Secretary of State. At present there is no certainty for local authorities as to whether late information will be taken into account in the making of the supplementary report. We want to create more certainty. Some authorities have already been seeking to exploit the present uncertainty. The previous Secretary of State received a telex from one authority purporting to contain new information just as he entered the House for the settlement debate. The proposed changes will enable the Secretary of State to disregard information which it is not "reasonably practicable" to take into account and to make appropriate assumptions where no information is available. I assure the House that the Secretary of State will make crystal clear the date when it will no longer be reasonably practicable for further information to be taken into account.

Mr. Beaumont-Dark: I have had a hand in running a great authority which often has great problems because sometimes information comes late in the day. I am sure that most hon. Members will accept: that it is nonsense, as my hon. Friend the Minister pointed out, for someone to

deliver a telegram as one is about to enter the House for the debate in question. Does my hon. Friend agree that it would be improper for the date to become too rigid? It would make it difficult for and unfair on local authorities if my hon. Friend were to lay down a time limit of a fortnight. What does he call fair and reasonable?

Mr. Waldegrave: It would be proper for the Secretary of State to discuss the matter with the local authority associations. He will be bound by the words "reasonable practice". If he took a decision which seemed unreasonable, it could and doubtless would be challenged in court.
This Bill is necessary to provide local authorities with certainty about their present and past grant entitlements. It validates a procedure which has been followed since 1981 with a broad measure of agreement from the local authority associations. The alternative to legislation would be total uncertainty for local councils about what their grant entitlements have been and could be. I hope that no reasonable hon. Member could seriously countenance that outcome. Therefore, I ask the House to support the Bill.

Mr. Jack Straw: On 10 April, the day of the Fulham by-election, when the words "Statement: Block Grant Multipliers" appeared on the television annunciators throughout the Palace of Westminster, many of my hon. Friends thought that the Government had finally taken leave of their senses. One or two of my more cynical hon. Friends thought that the Government had finally uncovered a secret weapon for stashing away millions of pounds of the then Conservative-controlled borough of Hammersmith and Fulham to stave off the near certainty of a humiliating defeat. Although the Government had no such luck, the announcement certainly ensured that the Benches were cleared for what turned out to be the announcement of an important but disreputable decision to introduce retrospective legislation to pre-empt the expected High Court decision the following Tuesday, and so to deny the ratepayers and the council of Birmingham of at least £7 million which was and remains rightfully theirs.
The Bill seeks to implement that decision, and the Benches are not much fuller today than they were on 10 April, for the same reasons. On the surface these matters are complex and technical, but that should not obscure from us the fact that, behind the smokescreen of obscurity that the Government have created, they must stand condemned for the chaos to which they have reduced the rate support grant system, not least for the way in which they have perverted and distorted the system to aid their political allies in local authorities and to hit their opponents.
First, I shall make some general observations about the system of central support for local government. Inherent in all systems of such support has been the idea that central Government should seek to compensate for different levels of need and resources, so that for a standard level of service the impact on ratepayers should be roughly the same in all authorities. We support such objectives. It follows that we also accept that any system which seeks to be fair is bound to be complex and apparently technical, since involved in such a system are mathematical assessments of need and resources area by area. We may and do argue about the methods used, about the


extraneous objectives that the Government have introduced through mechanisms, such as penalty and target, and about the overall percentage of the rate support grant. We do not complain in principle that any rate support grant system is bound to be complicated if it is to be fair.
As so often in the past, our objection is that the Government have used the complexity of the system to make it not fair, but unfair. That is the burden of our case. When the Minister made his statement on 10 April he asserted, as he did tonight, that he had adopted this position for the calculation of caps because it was the only sensible and practical way. Implicit in what he and other Conservative Members said was the suggestion that somehow Birmingham had late in the day and unexpectedly found a legal loophole to embarrass the Department and to obtain for itself some gratuitous, unanticipated advantage. That was also implicit in the Minister's remarks this evening when he spoke about the settled expectations, as if Birmingham were making use of a loophole in poorly drafted legislation. That is not correct.
First, since the day when the provisional announcement of the 1986–87 rate support grant settlement was made in July 1985, Birmingham has been making representations about what it felt to be the unfair and harmful way in which it had been treated.
Secondly, my hon. Friend the Member for Copeland (Dr. Cunningham) raised that issue in the debate on the rate support grant order on 20 January in his speech, at column 57, and again in an intervention in the speech of the Minister, at column 127, who made light of his objections.
Thirdly, Birmingham is correct to consider that it has been ill-treated because, contrary to what the Minister has suggested about settled expectations of the law, on the face of the language used in the relevant legislation the Minister had clearly not followed what Parliament plainly intended. Both section 8 of the Local Government Finance Act 1982 and section 59 of the Local Government, Planning and Land Act 1980 speak of the requirement for the Secretary of State to compare the grants payable to an authority in the current year with the "amount payable" to it in the previous year. The key words are the "amount payable", and for Birmingham those words meant the amount due to it. What else can they mean?
It is no good the Minister suggesting that the legislation is poorly drafted. It has been perfectly adequately drafted. The language is clear, and so is the intention of Parliament. Parliament passed that legislation, knowing what it meant, and it was on that basis that Birmingham went to court.

Mr. Beaumont-Dark: I have found myself agreeing and disagreeing with the hon. Gentleman. He knows that I thought that Birmingham should have a better grant. Bearing in mind the problems that we face, the system is rarely fair to our great cities. However, although I believe that Birmingham should have a larger grant, I still contend that the Government's intention at the time was that Birmingham should not have more grant, despite the fact that many hon. Members thought it should. As the hon. Gentleman knows, I have had one or two stand-up disagreements with my colleagues on local government legislation in the House, and, indeed, about the rate

support grant system. Does he agree that the Government have a right to the law as they thought it genuinely existed? It my be wrong, but it is not sharp practice.

Mr. Straw: I believe that Birmingham is right to consider that it has been the subject of sharp practice, as I shall show.

Mr. Robin Corbett: It is legalised theft.

Mr. Straw: As ever, my hon. Friend is correct.
I am not suggesting that Ministers were presented with a paper from their lawyers saying that the course that they were about to pursue was plainly unlawful, yet they chose to follow that course. However, the Ministers were wrong. If they received any advice, that was wrong, and Birmingham was right. It is no good the Minister talking about settled expectations or the fact that the system had broad support from local authority associations. They have thoroughly opposed what the Government have done in this rate support grant settlement.
A major point made by the Minister in support of the Bill was that if the judgment of the court was allowed to stand, although Birmingham and some authorities could benefit, other authorities would be bound to lose. That is inherent in the nature of a system that is close-ended. It cannot be a sufficient argument to justify what is proposed. First, Birmingham can rightly claim that it has suffered in the latest settlement significantly more than other authorities. We are told that the penalty system has been abolished. Technically, the target and penalty system has been abolished. Every £1 of extra expenditure over GREA costs Birmingham ratepayers £2·08. That compares with £1·47 for Liverpool, £1·83 for Manchester and £1·38 for Leeds. There can be no question but that Birmingham ratepayers have been unfairly treated.
Secondly, it must be said that, in the past, Birmingham and other authorities have suffered from redistribution. All hon. Members remember the second or third supplementary report of 1982–83 when the Greater London council obtained £100 million of rate support grant because the Department discovered that it had budgeted by about £170 million less than it thought it would. Because that was taken from a close-ended system, other authorities, including Birmingham and Lancashire, suffered. They did not scream about that; they accepted that that was how the system operated.
Nor does it lie in the mouth of the Government to make that point, because the reduction in the overall rate support grant has resulted in all authorities suffering and the effect of any redistribution being much worse than it otherwise would be.
The Minister said that those caps were introduced in 1986–87 to prevent gratuitous gains from the ending of targets in 1985–86. But the Government and the Minister do not come to the House with clean hands. No such considerations affected the decision that they made in 1983–84. My hon. Friends who represent Birmingham constituencies especially will recall that, in that year, the Conservatives were struggling to maintain their control of Birmingham city council. The response of the then Secretary of State, the right hon. Member for Wanstead and Woodford (Mr. Jenkin), and the Minister, who was at his side then, was to stuff money Birmingham's way by


fiddling the target system in Birmingham's favour. The then Secretary of State made little pretence about his motives. On 14 December 1983, he said:
The third change"—
in the target mechanism—
will give authorities such as Birmingham, which budget well below target, an incentive to continue to do so."—[Official Report, 14 December 1983: Vol. 50, c. 996.]
The result was that Birmingham Conservatives could cut the rate by 10 per cent.—

Mr. Corbett: It did them no good.

Mr. Straw: Indeed, it did them no good. I shall come to that point in a moment.
They could cut the rate by 10 per cent., despite budgeting for an increase in expenditure of, as it turned out, £40 million, or 12 per cent. In that year, Birmingham alone— if anyone suggests that I am wrong to maintain that there was a fiddle, he should consider this— took 19 per cent. of the increase in target available for the entire country. That was made clear in a reply given on 21 December 1983.
As my hon. Friend the Member for Birmingham, Erdington (Mr. Corbett) asserted, the bribe did not work and the electors of Birmingham tipped out the Tories in the municipal elections in May 1984. Birmingham has been punished by the Government ever since for so doing. The city was forced to increase its rate by 43 per cent. in 1985–86, despite increasing spending by only 6 per cent. —half the increase in 1983–84 by the Conservatives. The Bill is part two of that punishment.
Birmingham is not the only authority which rightly is aggrieved by the way in which multipliers have been used. I have been in correspondence with the Minister about the London borough of Greenwich relating to a matter which deeply worries my hon. Friend the Member for Greenwich (Mr. Barnett) and which he has discussed with me in detail. I need not detain the House on the complexities of that issue, but I hope that—

Mr. Christopher Chope: Where is he?

Mr. Straw: The hon. Gentleman asks where my hon. Friend is. He sends his apologies and has asked me to raise the matter in his absence. I hope that the Under-Secretary of State will respond to the Greenwich issue when she replies.
There are many detailed objections to the Bill and its drafting which can he pursued in Committee, but four of them must be raised here. The first is retrospection. I do not deny the fact that Governments of all complexions sometimes consider it necessary to introduce retrospective legislation. We are promised a catalogue from the Under-Secretary of State when she replies. The present Government have one of the worst records of any Government for retrospective legislation. Retrospective legislation is, as the right hon. Member for Wanstead and Woodford said on the Second Reading of the War Damage Bill 1965 —

Mr. Corbett: Where is he?

Mr. Straw: He has not sent his apologies to me. However, he said— and for once I am happy to quote his remarks with approval—that retrospective legislation was "a damned slippery slope". As I said in an intervention, it is no good the Minister pretending that there is a difference in principle between what happened

in 1965 and what the Bill does. He spoke about "settled expectations", or whatever the phrase was. Those were the words he used today, but I remind him that the words he used were:
Our proposition would maintain the status quo."— [Official Report, 10 April 1986; Vol. 95, c. 362.]
The idea that there is a status quo in rate support grant is a contradiction in terms, because there is no certainty from day to day. The Minister has taken back those words. Of course, the Bill changes Birmingham's rights retrospectively.

Mr. Waldegrave: I have not taken back anything. The hon. Gentleman is making heavy weather of this. If someone passed a law saying that his salary my salary or anyone else's salary for the past 10 years was to be cut by 5 per cent., and took away the money, that sort of retrospection would be deplorable; but if someone said, "Owing to a mistake by the computer, which has now been discovered, you should have been paid that much less, but we confirm what you have been paid," such retrospection, of the type contained in the Bill, is tolerable.

Mr. Straw: I am glad to hear that the Minister now accepts that, in both cases, the individuals or institution involved would end up with less than they thought. That is the connection between them.

Ms. Clare Short: Birmingham was shocked and worried by its previous rate support grant settlement. The city is in great difficulty and has received less money than it expected. That is universally agreed. Birmingham Labour Members have been on delegations to the Secretary of State. Let there be no doubt that the legal fight for £7 million was part of our enormous anxiety to get back some of the resources we considered were taken from us in that settlement. There is no argument about settled expectations being fulfilled; rather the reverse.

Mr. Straw: I am grateful to my hon. Friend. She makes the point again that the Bill will adversely change the expectations of Birmingham and several other authorities.
Ministers would be on better ground if they said that retrospective legislation which seeks to make lawful that which was previously unlawful is one thing — to put people in a better position than they were before. In the 18th century, there were plenty of examples of acts of indemnity which sought to do that. But to do the reverse, to make things unlawful which were previously lawful—to put people in a worse position— is not acceptable, and there would have to be strong grounds for doing it. Those grounds have not been adduced today.
The Government have become slap happy in the use of retrospective legislation. There have been examples in the Local Government Finance Act 1982 and the Local Government Act 1985 where the Government made unlawful grants to voluntary organisations from the GLC and the metropolitan counties, and in the Local Government Act 1986, where they changed the law relating to the sale of local authority mortgages after a due date when previously they had encouraged it. Of course, the new Secretary of State for the Environment, whom we welcome to the Front Bench tonight, has a good pedigree in retrospective legislation. His track record of overturning the courts' rulings is unsurpassed. We all remember what he did when the court found that what he had done on London Transport was unlawful. At least he waited until the court had made a decision. However, the Minister has,


in a breathtaking way, announced, three days before the case was to go to court, that, no matter what the court decided, the Government would legislate to change the law.

Mr. Corbett: My hon. Friend is mistaken. The matter is much worse than he is describing. When the matter first went to court, the Department of the Environment caved in. It knew, when the Minister made his statement, that it had been acting illegally because its legal advice was to that effect, and it knew that it had no defence. It knew that it would surrender in court, and then the Government would change the law.

Mr. Straw: I stand corrected for being too soft on the Government.
A second objection is that the retrospection goes too wide. This point was raised in interventions to the Minister, and we shall have to deal with it again upstairs. I find it odd that, because in a particular case that affects the settlement this year the law has been found to be defective, Ministers believe that they have to change the law for every decision made back to 1980. The decision of the Law Lords in the case of O'Reilly v. Machman in 1983 was that decisions made by Ministers or public institutions could be challenged only under the judicial review procedure.
That decision caught the Labour party. It was pursuing a case in the Chancery division against the Boundary Commission and it would probably have won, with Vice-Chancellor Megarry's interest in the case, when the decision was suddenly announced and it had to take it through the judicial review procedure, where it lost, for a variety of reasons. Order 53 laid down time limits for taking issue with ministerial and other public decisions. There is no question about challenging the decisions of previous years. Even if there is a case for retrospection, the Bill goes too wide.
Thirdly, it leads to an undesirable increase of the power of the Secretary of State under clause 2.
Fourthly, it will deny Parliament information on which to base its decisions. Paragraph 8 has already been discussed in interventions. I have great personal respect for the Minister, but, on the experience of the past six years, we have to bear in mind that we should treat with a pinch of salt ministerial undertakings that they will be reasonable and take everything into account. If the Minister were in charge of the Government, that might be fine, but he has to think about the Secretary of State and the Treasury. The Treasury does not give a fig for undertakings given to the House. If it thinks that it can get away with something, it will try to do so. Paragraph 8 gives the Minister powers to give the House only that information that he thinks is desirable, and that is unacceptable.
The Government now find themselves in a bog of their own making by seeking, in successive years, further to control local authority spending in an undemocratic and impractical way. We now see that, for all the pain that has been inflicted on local authorities, Ministers are unable to work out what it has all been for. Before he was translated to the Department of Education and Science, the previous Secretary of State was reported as saying that he had had a look at this mad system and could not work out what it was there for.
Treasury Ministers, according to the usually authoritative Financial Times, are now questioning what this vast edifice of insanity is for. The newspaper says:
Expenditure funded by the rates, rather than centrally, does not affect the public sector borrowing requirement.
Some Treasury officials also support this view and Mr. Nigel Lawson, the Chancellor, feels that the Government's persistent rows with local councils over their finances are more political trouble than they are worth.
The Chancellor is right about that, if about nothing else. Although the Government have perceived that the system is mad and is doing nothing for them, they will not follow their perceptions through to a logical conclusion. If they had any sense, they would withdraw the Bill, destroy the rest of this appalling edifice, and start again.
This Bill is unworthy. By its unnecessary retrospection it shows scant regard by the Government for the rule of law and respect for the courts that they claim to hold so dear. The Bill denies the ratepayers of Birmingham £7 million, which is rightfully theirs, and further sours relations with local authorities. We shall oppose it.

Mr. Simon Hughes: My colleagues and I shall also oppose the Bill for some of the reasons enunciated by the hon. Member for Blackburn (Mr. Straw), and for other reasons. I shall state our objections to the Bill and then ask the Minister one or two questions on which he has not touched, although I do not criticise him for that.
As the House has heard, the announcement of this Bill was made to pre-empt the court hearing on the following Tuesday, as the Government had been told that the court was likely to find against them, which would undermine the basis of the last few years of rate support grant calculation. I understand the Minister's point that, if that decision had been upheld, there could have been many legal actions challenging all the rate support grant settlements and multipliers of many local authorities for several years. That could have brought in more uncertainty and more cost than would have doing something quickly.

Ms. Clare Short: I intervened in the Ministers's speech to make this point, although he did not react to it. Birmingham's view is that the judgment affects only caps and not safety measures. The language of the legislation is different in both cases. Caps have been set only in 1981–82 and 1986–87, so the Minister is exaggerating. The case for the Bill is weakened if this point is true, but the Minister did not answer it. No legislation on safety nets has been called into question, and that practice has been adopted much more frequently than have caps.

Mr. Hughes: The hon. Lady is right in the sense that two mechanisms have recently featured in the multiplier. One has come to be called the cap and the other the safety net. The hon. Lady is correct to say that Birmingham was advised that the probability was that the direct effect of the judgment would be only to challenge one of those, so that it would not have applied in more than certain cases for a limited number of years. The difficulty is that undermining the nature of ministerial calculations, which we have all criticised because they are plucked out of the air by the Government as their method of adjusting the formula, left open to others, whether they were ultimately vindicated or not, the possibility of challenging the multipliers in court, and being upheld. We do not know


about the result of that for sure, and we never shall. I accept that there was, however, a possibility that there might have been a substantial undermining of the system, but it might have been reduced to just one or two cases.
I understand, and I would be grateful if the Minister would confirm this, that four identified authorities stood to benefit in the same way as Birmingham had the Bill not come before us, rather than one, as had previously been thought. I understand that Nottingham was one of them, and that it became a well known and accepted fact between the Department and officials in the Nottingham city council. It would be helpful to know, because we have not talked about any example other than Birmingham, whether it was clear that certain other authorities fell in the same category.
It would be useful to clarify whether there are vested interests in the result of this legislation. If Birmingham and Nottingham will lose what they calculated they would gain, and if the total pool of money were always the same, other authorities will gain. I have received a briefing, as other hon. Members have, from the Association of London Authorities. It says that for them it will not be disadvantageous for the Bill to go through because London authorities will be the beneficiaries of the system as readjusted. If the pool is the same and if one is altering the formula by which it is distributed, inevitably there will he winners and losers. It would be fair both to the House and to local authorities if the Government were to tell us which authorities they were advised would have stood substantially to benefit, in the way that it was made clear that Birmingham would have benefited.
I was about to turn to the more important matter concerning retrospection when the hon. Member for Birmingham, Ladywood (Ms. Short) intervened. Rather than that the Government should have to amend the law, thereby validating the payment of rate support grant and the multiplier formula and their right to use the multiplier since its introduction in the Local Government, Planning and Land Act 1980, it would have been possible to legislate to prevent any challenge on those matters, although the Birmingham case could have stood. There is some justice in an argument that acknowledges that the case is deficient, but that because money is limited the system must not be perpetually undermined and uncertainty increased.
One of local government's complaints is about uncertainty and the complexity of the system. It would be possible for the Government to agree to stop the clock and prevent any challenge, to say that after a certain time challenges cannot be made on certain grounds. That would have been a much less dangerous course for the Government to pursue rather than retrospectively to legislate generally. There are occasions when one can legislate retrospectively to correct something that has been to somebody's disadvantage, but it is completely different to legislate retrospectively when people have worked on the premise that they will obtain an advantage — in Birmingham's case £7 million—that they are then told they cannot have.

Ms. Clare Short: Will the hon. Gentleman give way again?

Mr. Hughes: There is a difference. I hope that the Minister will accept that if retrospection is acceptable in

this case, the argument is invalid because this is retrospective legislation which will be to somebody's disadvantage. I give way to the hon. Lady.

Ms. Short: I am grateful to the hon. Gentleman for giving way. He might like to know Birmingham's calculation. It thinks that the court ruling potentially affected 30 shire counties, 121 shire districts, eight metropolitan districts and one outer London borough. We are probably talking about £150 million. The low spending authorities were capped under the new settlement. That is the figure that Birmingham puts on the hon. Gentleman's proposition that nobody should be denied money retrospectively.

Mr. Hughes: That is helpful. Although local government financial legislation is technical, it is not at all technical to local government treasurers, and local government ratepayers are not concerned with technicalities. They are concerned about the services that are provided for them. Substantial amounts of money —perhaps one-tenth of the total budget, in terms of rate support grant from the Government—are involved.
I intend to make two or three further general points of criticism and then to ask a few questions. One of the complaints is that there is a perpetual moving of the goal posts relating to local government finance. If the rules are to be changed halfway through the planning process, it is horrendously difficult for anybody to plan ahead. There is a year-by-year allocation of funds. There is to be a recycling of money this year because of the new system. Furthermore, I understand that the preliminary announcement about next year's rate support grant will not be made in July, as has been the case in recent years, because of complications—including the one before us now. That makes it increasingly difficult for local authorities to plan their budgets. Local government says to central Government, "You are treating us unfairly. You set down a system. We go to court and we are upheld by the court. You then say that we cannot have our victory, and you perpetually change the rules. When we play by them and win by them, you tell us that that is unfair." That cannot be a fair balance.
We accept that the courts have a role to play if people feel that the law has been misinterpreted. Therefore it is unfair to local government to say that if it is clever enough, intelligent enough or needy enough to go to court and find ways round the law, that will be rendered unlawful, and the Government reserve the right to change the rules whenever they find that that is to their advantage.
The Bill purports to clarify the law. I do not believe that anybody can say that by this legislation the Government are fundamentally clarifying the law. Having started on the road of seeking to clarify the law and getting rid of penalties, I hope that under the new regime we shall be able to get to grips this year with the need to make local government finance clear so that local authorities can plan ahead. If the Minister takes on board the Chancellors point that there is not now the same view in the Treasury about local government expenditure having a direct effect on general public expenditure, perhaps local government can be given the freedom and planning ability for which they have been clamouring for so long.

Mr. Tony Banks: Is the hon. Gentleman seriously suggesting that this Government are in any way interested in making local authority finance


clear? Is he not aware that this question has very little to do with economics but that it has a great deal to do with politics?

Mr. Hughes: My earlier intervention, which challenged the Government's plan to change schedule 1 to allow the Secretary of State to supply information under a new definition only if he thinks that such explanations are desirable, will, I hope, answer the hon. Gentleman's question. I have always believed that the view of the people in Marsham Street and their Ministers is to retain as much control as possible, to make everything as obscure as possible and to make life in local government as dependent upon central Government as possible. My party has long fought against that.
There have even been rebellions by Government Back-Benchers. They complain bitterly that the system is suspectible to gerrymandering. That complaint was made last year when the counties were screaming because London was getting more money. Why was that? It was because there were local government elections in London —as there were in Birmingham in 1983, although that did not do the Government much good there. The system is perpetually susceptible to gerrymandering. However, it did no good in London, as it did no good in Birmingham three years earlier.
That is why we must be suspicious and say to the Government that we want a categoric undertaking that in future we shall be given not one jot less of information than we are given now. If this legislation is passed, it will allow the Government to give considerably less information to local government than they do now. It also provides the Secretary of State with considerably greater powers than he currently enjoys.
The perpetual battle in this House is for the legislature to have more power over the Executive. However, the Government keep on insisting that they should have more and more power. When that power is abused, the Government immediately introduce new laws to change what the courts say is wrong.
My last point is that there are certain authorities—one of them, about which I am most concerned, is Avon — that are themselves concerned about whether their grant for the current year is to be redetermined. The Minister knows that an all-party deputation from Avon was due to meet the Secretary of State tomorrow afternoon. However, the meeting was postponed at the last minute by the Secretary of State, and no further date for the meeting has been set. That all-party delegation includes Conservative councillors. They had intended to ask the Secretary of State to redetermine Avon's grant, and they wished to be sure that this legislation would not impede that. They had done what everybody else was doing, and as they were supplied more information about their figures they realised that they were entitled to a substantial amount of money through a redetermined grant at a higher level, which would be to the advantage of the people of Avon.
I have specifically raised the case of Avon, but my question also applies more generally. Will the Minister assure me that nothing in the legislation will prevent Avon and other such authorities which have perfectly good grounds for arguing for a redetermination of grant, and were led to believe by the Government that that was

possible, from, first, being able to argue the case and, secondly, from being able to have that redetermination? I also ask the Minister for a specific undertaking that the postponed meeting with the all-party Avon delegation will be rescheduled in the near future so that it can put its case, have it listened to sympathetically and possibly benefit from the Government's response.
The House is becoming used to many debates each year on local government finance — rate support grant preliminary announcements, actual announcements, supplementary announcements, correcting announcements and matters being put right after appeals to courts when the Government have misunderstood their own legislation. As this is the first occasion under the regime of the new Secretary of State, I hope—although I have little grounds on the Government's record over the past seven years for doing so — that the Government will remember that without fundamental reform and clarification of the structure of local government there will be more and more such difficulties. The Government are lying on a bed of nails of their own making, but those who really suffer are, tragically, not the Ministers in Whitehall but those trying to run our local authorities and who have a very difficult job under current Government policies.

Mr. Michael Portillo: I have some sympathy with the closing remarks of the hon. Member for Southwark and Bermondsey (Mr. Hughes) when he called for a more simplified system. After many years of unchallenged operation of the law on block grant multipliers, it has now been challenged, found to be defective and different from what we had assumed, which leaves the Government with the practical problem of what to do about it.
The hon. Gentleman acknowledged that the uncertainty caused by the court case could be widespread and could undermine the system back to 1981. Although it is possible to hold different views on that, the Government must recognise that there is uncertainty. The hon. Gentleman also said that the matter did not relate only to Birmingham, although it is understandable that many Birmingham Members are present this evening to put their views.
There was a little inconsistency in the hon. Gentleman's comments. For example, although he said that uncertainty was damaging to local government, he did not make clear his proposals to deal with that. I am not sure whether I agree that capping the challenges to courts would be better than retrospective legislation, even though that can cause great disquiet. The hon. Gentleman suggested that we should allow Birmingham's case and make sure that there were no further challenges, but I am not sure that, as a matter of principle, that is the better solution.

Mr. Simon Hughes: I thought that by a combination of that process and adjustment in the coming year it would be a matter for the future that would not involve the unravelling of the whole package for four or five previous years.

Mr. Portillo: I understand that, and I share the hon. Gentleman's views on retrospective legislation. However, later in my speech I shall explain why, on this occasion, I think that the Government are right.
I unfortunately missed the Minister's statement on 10 April because I was helping the excellent Conservative


candidate in Fulham on that day. I was sorry that I was not here, because I was not able to enjoy the remarks of the hon. Members for Blackburn (Mr. Straw) and for Bolsover (Mr. Skinner), and those of hon. Members representing several Birmingham constituencies. I use the word "enjoy" advisedly, because when a Government operate a law that is challenged in the courts and found to be otherwise than what was supposed, it is a cause of considerable mirth and enjoyment on the Opposition Benches. Some years ago I worked in the Conservative research department, supporting the then Conservative Opposition. I remember how very much we enjoyed those occasions when the Labour Government ran foul of the courts.
On 10 April the hon. Member for Blackburn did not disappoint us — he was clearly enjoying himself. He referred to
a serious constitutional issue—a bare-faced attempt by the Government to interfere with the judicial process." — [Official Report, 10 April 1986; Vol. 95, c. 360.]
Today, his remarks did not follow in the same vein. The intervening weeks have moderated his tone.
When the Conservative party was in opposition we had all sorts of opportunities to enjoy ourselves, and we certainly did. For example, when the right hon. Member for Bethnal Green and Stepney (Mr. Shore) was Secretary of State for Trade he found himself in the unfortunate position of having revoked licences granted by the Civil Aviation Authority to Laker Airways for a low-fare service between London and New York. On appeal, the High Court ruled that he had acted beyond the powers conferred upon him by the Civil Aviation Act 1971. In December 1976 the Court of Appeal overturned the appeal of the Department of Trade. Lord Denning, who was then Master of the Rolls, said that there came a time when the courts had to declare that a Minister of the Crown had exceeded his powers. On that occasion Mr. John Nott said:
at least one Socialist Minister accepts that the rule of law applies to Labour Ministers as well as to every other citizen of this country."—[0fficial Report, 14 February 1977; Vol. 926, c. 32.]
Lord Mulley, when he was Secretary of State for Education and Science, was unfortunate enough to interfere with the Conservative-controlled Tameside authority in Greater Manchester. He was taken to court and found to have been unreasonable in his actions. Lord Denning referred to him as having misdirected himself on whether it was unreasonable for Tameside to retain some form of selective education.
The right hon. Member for Glasgow, Hillhead (Mr. Jenkins), when he was Home Secretary, found himself in some difficulty over television licences. Some people had bought new licences at the old rate after the new rate had been announced, which was perfectly legal. However, the right hon. Gentleman refused to accept that and threatening letters were sent to people demanding payment at the new rate on the pain of having their licences revoked. The ombudsman stepped in, reported that there had been muddle and inefficiency in the handling of the cases by both the Home Office and the Post Office, and the right hon. Gentleman was forced to apologise. The Court of Appeal decided that his attempt to revoke licences was unlawful, invalid and had no effect. That was the case of Congreve v. The Home Office and was reported in The Times on 4 December 1975. On that occasion my right hon. Friend the Member for Chesham

and Amersham (Sir I. Gilmour) weighed into the debate and said that it was the first time a Home Secretary had been
censured by the Ombudsman for maladministration and then condemned by the Court of Appeal for contravening the Bill of Rights."—[Official Report, 8 December 1975; Vol. 902, c. 235.]

Mr. Waldegrave: May I remind my hon. Friend of one other case? Does he remember when the former Labour Prime Minister, now Lord Wilson, threatened to revoke dog licences, and all his colleagues started yapping at the same time? Was that another example of the revocation of licences?

Mr. Portillo: I remember that case, although my hon. Friend will forgive me if I say that I had not thought of including it in this particular catalogue.
This is not the first time that a Government have found themselves in difficulties with the way that the law stood, despite its interpretation.

Mr. Terry Davis: Can the lion. Gentleman tell us from memory, or as a result of his researches, whether the Labour Governments of those times introduced Bills in the House of Commons to revoke people's licences, and so forth?

Mr. Portillo: The hon. Gentleman anticipates my remarks, or perhaps I anticipated his intervention. I shall come to that point shortly.
I am not suggesting that the hon. Member for Blackburn, whose remarks of 10 April I have already quoted, is the first Opposition spokesman to go over the top in criticising a Government who find themselves in this position. Nor am I saying that those Labour Ministers— the Home Secretary, the Secretary of State for Education and Science and the Secretary of State for Trade— were in any way acting dishonourably. They were clearly interpreting the law as they saw it. They were certainly doing things with which I strongly and wholeheartedly disagree, but I am sure they were honourable in interpreting the law as they saw it, and I am sure also that they were acting in accordance with the advice that they were given, which I am sure was given in good faith by the officials who were paid to give that advice.

Mr. Tony Banks: Does the hon. Gentleman recall that when the GLC introduced its "Fares Fair" policy and thought that it was operating under the Transport (London) Act 1969, unfortunately, as a result of the Bromley court case, it was revealed that it was not doing so, and the Prime Minister refused point blank to introduce any legislation to enable that council to carry on in a lawful manner? There seems to be one law for a Government and another for a local council.

Mr. Portillo: I do not share the hon. Gentleman's familiarity with that case. I remember it dimly, and I feel sure that there are a number of points which he may have rather selectively failed to make about it. I am in some danger of wearing your patience rather thin, Mr. Deputy Speaker, so may I return to the case in point?
We are discussing a rather special and particular case, because we are not dealing with a single administrative act, which I think we were doing in the three examples that I have quoted, which dealt with television licences, a licence to an airline and a problem which had arisen with a local education authority. In this case my hon. Friend the


Minister has run into a problem with a practice which has been going on over five or six years. During that time there have been frequent opportunities to question that practice. There have been frequent references to block grant multipliers in the House. Annual rate support grant reports have been made available to the House. The hon. Member for Blackburn could not be accused by any hon. Member of being anything but assiduous in the way in which he conducts his duties, but, as far as I am aware, he has not campaigned actively over a period of five or six years on this issue, saying that the Government have got the law wrong and that it is clear that the thing should not operate in this way. He has not, as far I know, been stirring up local authorities, which might have a grievance, to take the matter to court, to make sure that the law was tested and to bring the matter back to the House if further legislation was necessary.
As far as I know, the hon. Gentleman, like the rest of us, has woken up to this rather late in the day. Indeed, he rather gave himself away when he said that my hon. Friend the Minister's statement appeared on the Annunciator on 10 April 1986. It was clear from the way in which he referred to it that he had been taken entirely by surprise. So far from campaiging, or feeling a great grievance on the issue, he and his hon. Friends were not aware that the point had arisen at all. For five or six years they acquiesced in an understanding of how the law operated.

Mr. Patrick Thompson: Does my hon. Friend agree that the reason why hon. Members on both sides of the House did not wake up to the fact over many years is that the complexity of the matters surrounding the rate support grant is notorious? It is well known that the number of people who understand it is so few that it is difficult to find them.

Mr. Portillo: My hon. Friend is characteristically kind to the Opposition, and he is right to be so. I started that passage of my speech by saying that I made no criticism whatever of the assiduous way in which the hon. Member for Blackburn approaches his duties.
Once we have got over the bogus indignation that has been expressed by the Opposition, once we have got over the exaggerated mirth, which I understand, with which the Opposition have greeted the sight of a certain amount of egg on the faces of a few Ministers, there is the serious matter of what should be done. I share with the hon. Member for Southwark and Bermondsey, and certain other hon. Members, a natural dislike of retrospective legislation. It is right that we in the House should be suspicious of that, but the principle that we dislike retrospective legislation cannot be applied entirely without regard to the particular circumstances.
The particular circumstances in this case are that since 1981 there has been a common perception of how the law stood. All the years in which the block grant multipilier has applied it has been determined, settled and closed. In one particular year one particular local authority thought that it was doing badly out of the system and challenged it. It did so successfully in the sense that the law has been shown to be flawed, but it would be absurd to suggest from that that the whole shooting match should now be undone. It is not at all clear to me in whose interests that would be. It cannot even be clear to any local authority in whose interests that would be, because the calculations are simply

too complicated for us to work out who would stand to gain or lose. However, I am sure that the chaos which would ensue would be in no one's interest.
It is interesting that the hon. Members for Southwark and Bermondsey and for Blackburn both referred to the difficult situation in which local authoritites find themselves anyway, operating in a situation of uncertainty. Therefore, I am sure that on consideration both those hon. Gentlemen will feel that they would not wish that the uncertainty be made even greater. Indeed, I think that the hon. Member for Blackburn said something to the effect that a certain amount of retrospection would be justified in this case—

Mr. Straw: No.

Mr. Portillo: I am sorry if have misquoted the hon. Gentleman. I thought that he was coming close to saying that there might be some case for retrospection, but that he thought it went too widely.

Mr. Straw: I think that the record will show tomorrow morning that I said no such thing.

Mr. Portillo: We shall rely on the record, and if I have misquoted the hon. Gentleman I shall apologise to him unreservedly.
It cannot seriously be wished by anyone that uncertainty and chaos should be the result. It is for that reason that I am pleased to give my support to the Government on this occasion. However, I want to return to the point made by the hon. Member for Southwark and Bermondsey that simplification of the system is desirable. I do not think that there is any disagreement on that. My hon. Friend the Minister has said that he wishes the matter to be simplified, and I know that that will be forthcoming in due course. All I can say is, the sooner the better.

Mr. Terry Davis: The Minister began by describing the Bill as dealing with a most complicated matter. I agree with that point, but the issues involved are straightforward in fact. Before dealing with those issues, I must first deal with two of the Minister's points which I regard as red herrings.
First, the hon. Gentleman referred to the system having been introduced to limit grants as a result of overspending. Birmingham city council, whether Conservative or Labour, has never overspent. On the contrary, under both the Labour party and the Conservative party, it has kept within the rules. I repeat that it has always played the game according to the rules.
The second red herring referred to "settled expectations". There were never any settled expectations in Birmingham about the present level of the rate support grant. From the beginning — indeed, before the rate support grant was announced—Members of Parliament from Birmingham went on deputations to see the Secretary of State for the Environment to complain about the way in which Birmingham was being treated as a result of the consultation announcements and the information which the city council had gleaned from the local authority associations. We complained to the Secretary of State then, and we continued to complain, about the way in which Birmingham was being treated. At no time did the city council or Birmingham Members of Parliament accept


that the city was being treated fairly, and at no time did we accept the settlement as announced by the Secretary of State.
Turning to the real point, I must tell the Minister that he has clearly not understood the depth of feeling among Birmingham Members of Parliament and the Birmingham public over what we regard as a grossly unfair decision. I refer not to the decision about the amount of the RSG but to the decision to introduce this Bill tonight. It is a most unfair piece of legislation.
The point about retrospection is simply another of the Minister's red herrings. Indeed, the hon. Member for Enfield, Southgate (Mr. Portillo)) has also misunderstood the point. No one is questioning the RSG settlement for previous years. We are advised that it is unnecessary for two reasons to introduce a Bill in order to leave those settlements untouched. The hon. Member for Southgate has obviously not appreciated that caps—as distinct from safety nets— have only applied in two years. No one has raised the question of the use of multipliers for safety nets. The only issue has been the use of the multiplier for caps. Yet the cap has applied in only two years—1981–82 and the current year, 1986–87.

Mr. John Watts: Can the hon. Gentleman give an undertaking that no authority would wish to challenge the use of multipliers for safety nets? That is the contingency against which this Bill must provide. The fact that only caps have been challenged in the courts thus far is no guarantee that there will never be a challenge over the use of safety nets.

Mr. Davis: If the Government are concerned about being challenged in future about the use of multipliers for safety nets or caps, they can introduce a Bill to deal with the future. I object not so much to the introduction of a Bill to deal with future years as to moving the goalposts this year. I will come to that point in a moment, but first I want to emphasise that there cannot be a challenge to the rate support grant settlements of previous years.
The Minister had no answer earlier to the legal point that I raised. I look forward to a reply from his hon. Friend the Under-Secretary of State. We are advised that, as a general principle of public law, the determinations of rate support grants are treated in all respects as valid unless challenged speedily and within the time applicable for a judicial review. That was established in the case of O'Reilly v. Mackman in 1983. At present, there are no outstanding challenges to any previous year's RSG settlement—the only year in question is 1986–87—so it is not open to any aggrieved local authority to go to court and to ask for a judicial review for previous years. That is water under the bridge and a local authority could not do that, even if it wished to do so. That is a matter of fact. Thus, the Bill is unnecessary in respect of previous years.
As for the future, the Opposition might disagree with or vote against a Bill that introduced the use of multipliers in this way for safety nets or caps, but that is not the main challenge to the Government tonight. Our objection to this Bill is that it deals with 1986–87. That is what is unfair. Birmingham city council went to court and obtained a decision in its favour and against the Department of the Environment. In court, counsel for the Department of the Environment admitted that the Department had acted illegally. Now the Government want to change the law,

and that is what is unfair. That is what we object to. It is a matter not simply of retrospection but of changing the rules.
The hon. Member for Southwark and Bermondsey (Mr. Hughes) referred to moving the goalposts. In this case, Birmingham city council scored a goal, and then it was announced that the goalposts had been moved. The objectionable thing is that the goalposts were moved after we had scored. Perhaps I can put it another way. If a footballer knocks the ball into the net with his hand, instead of heading it in—we can all think of examples like that — and the referee blows his whistle and discounts the goal, the football authority does not then say that it will change the rules. It will not say that it was a goal. Indeed, if that happened, we would all say that it was grossly unfair. Yet that is how the Government have behaved. That is what the Government are doing, and I am amazed that any democratic Government should behave in that way.
The hon. Member for Southgate did not respond to my intervention as to whether Labour Ministers had changed the rules in this way. I do not believe that the right hon. Member for Glasgow, Hillhead (Mr. Jenkins), for example, changed the law so that he could revoke those television licences. We do not expect Governments of any party to behave like that when dealing with the rights of individuals or of citizens collectively.
I shall deal with the remarks of the hon. Member for Slough (Mr. Watts) in a moment, but I shall give way first to the hon. Member for Southgate.

Mr. Portillo: In the case of television licences, a limited number of people were affected for a limited number of weeks. But in this instance the law was thought to be one thing for five or six years. Although the hon. Gentleman and the hon. Member for Birmingham, Ladywood (Ms. Short) have argued strongly that the advice received by them is that this does not unstitch the whole package, we cannot rely on that advice. The whole package may be unstitched, and that is why we need to make the situation clear.

Mr. Davis: If, for the purpose of argument, the Government said that they did not want any doubts or any uncertainty or any more court cases covering the years from, say, 1981 to 1985, and if they said that they could not reopen the question of all the RSG settlements made in the past, there might be a certain amount of mirth, teasing and even opposition, but the argument would be qualitatively different.
In this instance, a council went to court and challenged this year's RSG. It succeeded and obtained a judgment saying that it was right, and that the Secretary of State for the Environment had been acting illegally. It even obtained a judgment that the Secretary of State should pay the council's costs. Yet, despite that, the Secretary of State and his junior Ministers have introuduced a Bill to change the rules. That is wrong.
I have an example that should be fresh in the memory of the hon. Members for Southgate and for Slough. I believe that both of them serve on the Finance Bill Committee. As good attenders, they will remember that the Government moved a new clause in Committee only 12 days ago designed to deal with the taxation of golden handshakes. After all, this Rate Support Grant Bill is not the only example of messy draftsmanship. In 1981, the


Government introduced a change in the taxation arrangements for golden handshakes. We are talking about the tax levied on very big golden handshakes—the sort given not to people in the city of Birmingham but to those in the City of London. The Government agreed that a special tax should be imposed on handshakes in excess of £50,000. However, it recently came to light that they had made a mess of the legislation. The Government rightly said that they would have to change the law. The Labour party supported the original introduction of that tax and also agreed that the law should now be changed. Thus, at a very late stage the Government have added a clause to this year's Finance Bill; but they have not said that they will collect all the tax that they thought they would collect. They have not said that they would get the tax back from those few hundred people whom the Financial Times estimated had escaped £10 million of tax. The Treasury rightly said that it would have to pay that. Indeed, it is going further than that. Those who should not have paid tax will be encouraged to apply for a refund. The Government are going to advertise saying, "Come and get your money back." Correctly, the Government are paying the cost of the mistake estimated by the Financial Times to be over £10 million, but wrongly they are legislating to take £7 million away from 1 million citizens in Birmingham. That is objectionable. The Government are changing the rules. In Birmingham that action is seen to be close to cheating or legalised robbery.
When the Conservatives were in opposition they made great play of what the present Lord Chancellor called "elective dictatorship". Now the Conservatives in government say that if they make a mistake there is no point in bothering to go to court because they will introduce another Bill to take away the court's decision. That is truly an elective dictatorship.
Conservative Members will he whipped into the Lobbies tonight to support the Government and to support legislation which is grossly unfair. Indeed, it comes close to cheating. The Bill is both shabby and squalid. Conservative Members should be ashamed of voting for it.

Mr. Patrick Thompson: I shall certainly support the Bill because it is common sense that one must regularise the law to bring about something which is already a de facto occurrence. I shall not he misled by the hon. Member for Birmingham, Hodge Hill (Mr. Davis) who over-emphasised his case.
The Bill validates the distribution of rate support grant and clarifies or amends the law on rate support grant. With respect to parliamentary draftsmen and others, I have to say that on my reading of the Bill I cannot regard it as a clarification. However, I defer to those who are more expert than me, and I shall continue on another occasion my campaign for plainer English in legislation. I hope that the Bill will prove to be a clarification of the law, and I shall comment on the effect that block grant determinations will have on my constituency. The Bill directs the arrangements and they will have an effect in Norfolk.
My constituents are affected by Norfolk county council and by two district authorities — Broadland district council and Norwich city council. I am in a unique

position to see the anomalies caused by the complexity of the rate support grant system. Broadland district council is well known as being one of the lowest spending local authorities in East Anglia. Norwich city council has a different reputation and is controlled by the Labour party. That is a distinction that I recognise more than do many of my hon. Friends.
The result of recent rate support grant decisions was as follows. In Labour-controlled Norwich, business and domestic ratepayers face an increase from 184·7p to 211·9p. In Tory-controlled Broadland the increase is from 159·1p to 187·8p. That means that although the settlement had an adverse effect on the lower-spending Norfolk and Broadland district councils, business and domestic ratepayers benefit most from Tory control.
I can illustrate that. A business in Norwich this year faces an increase of 14·7 per cent. A total of 19 per cent. of that is due to the county rate increase, whereas zero per cent. is due to the lack of change in the rates announced by Norwich city council.
Let us compare that with what happens in Cambridge. A business there faces a rate increase of 30·4 per cent. —double that of Norwich. The county — under alliance control— is responsible for 33 per cent. of that increase and the city for 9 per cent. Nationally, it is evident that hung councils, or councils under alliance or any other Opposition control, impose higher rates and spend more, to the disadvantage of business and industry. It is becoming apparent that alliance councillors in Norwich and Broadland are pressing for more spending, so that the situation I have described will become even more serious in future.
The low spending shire counties had a raw deal in the rate support grant settlement because of the change in the formula in favour of the inner cities. With my East Anglian colleagues I resisted that change. We fought hard, and continue to fight, for the lower spending councils. Norwich city council received a generous settlement and was well placed to reduce rates, if it had been so minded.
Some correspondence has taken place between my hon. Friends and the Under-Secretary of State. I have letters about Norfolk county council and Norwich city council to which I shall refer briefly. One letter says:
In 1985/86 Norfolk budgeted to spend £225·416m and therefore received £92·705m in grant. In 1986/87 they would have received £89·370m in grant if they had increased their expenditure by 3·4 per cent., i.e. the settlement spending assumption. This slight reduction in grant of £.3·335m is mainly due to the reduction in the overall amount of central money available to support local authority spending. Norfolk also lose slightly from changes made to the Government's methodology for assessing a standard need for spending on services.
I could read more from the letter, but that would try your patience even further, Mr. Deputy Speaker. Having read that explanation, it is still no clearer to me why Norfolk ratepayers face a 19 per cent. increase this year. The Eastern Daily Press dated 14 June carries an article headed "County careful spenders." The article states:
Norfolk County Council services are among the most economical in the country, according to an independent report published yesterday.
My point is simple. If that is so, it is difficult to reconcile it to the way in which the recent rate support grant settlement has worked for Norfolk. I shall not develop that further, but will refer to what is happening in Norwich, one of the two district councils. According to my hon. Friend the Under-Secretary of State,


Norwich budgeted to spend £10·253 million, and therefore received £2·019 million in grants. In 1986–87, the following year, it would have received £2·921 million in grant if they had increased their expenditure by 3·4 per cent. in line with the settlement spending assumption. This increase in grant of £0·902 million is mainly due to the new assessments of the standard need for spending on services. (Grant Related Expenditure). Norwich's gain from this is partially offset by the effects of the reduction in the amount of central government money available to support local authority spending and the introduction of new grant mechanisms".
The layman— I include myself—finds it difficult to ascertain exactly what this all means for Norfolk, Norwich city council or Broadland district council. I remain convinced of two main points, however. First, Tory-controlled authorities spend carefully, which leads to low rates, while alliance and Labour-controlled authorities lead to pressures for high spending and high rates. Secondly, I am convinced that there is a strong case—I shall deploy it whenever the opportunity arises — for giving a fairer deal to authorities that try their utmost to contain their spending and to eliminate waste. I accept that there is waste in Norfolk county council spending and in Broadland district council spending, but at least they are making some attempt to contain wasteful spending, and more account should be taken of that.
There is no doubt that the system of GREAs and targets is already discredited. I have a letter dated 28 January from the then Secretary of State for the Environment, my right hon. Friend the Member for Mole Valley (Mr. Baker). It states:
the unstable and complex way in which Government grants are paid, which obscures local accountability".
That is not a complete sentence, but it makes the point that the system is discredited. In future, there must be greater incentive for councils to spend carefully and wisely. Local government finance desperately needs reform, and for a number of reasons. For example, many of us who are interested in education are concerned about the effect of local government finance on the workings of the education system.
I hope that this evening my hon. Friend the Minister will give the House an assurance that active consideration is being given to a simpler and fairer system of local government finance as foreshadowed in the Green Paper. Let us hope that that is merely a start. It is my hope that from there we shall try to simplify the system to make it better and fairer, especially as it affects my constituents in Norwich, North.

Ms. Clare Short: The Bill is all about the Government legalising what would otherwise be illegal underpayment of moneys. For example, the Government owe Birmingham £7 million. When discussing local government finance we talk about so many millions of pounds and billions and it might not be appreciated how large the sums really are. For example, the House will be authorising tonight the loss of £7 to every man, woman and child who lives in Birmingham. That is what it is all about. Birmingham is suffering badly, and £7 for every man, woman and child is a large sum overall. The effect of removing that money from Birmingham is that many people have lived in enormously grotty housing. There are many homes that have black mould on the walls, and we know that this has an effect on children's lungs and their breathing.
Conservative Members really are mice. Other authorities which have suffered as a result of the underpayment are almost all Tory controlled. The authorities which have been so affected do not come within the exaggerated argument that has been advanced by the Government and by Conservative Back Benchers who, presumably, have been briefed by them. They have not been in that position as a result of the rate support grant settlements over the past five or six years. I am talking instead about the effect of the cap. We cannot go back to the 1981–82 cap because of the legal authority which was referred to by my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis). This means that we are talking about the effect of the cap this year.
It should be understood that there has been a change in the way in which money is allocated by central Government to local government this year. The policy used to be "You cannot spend more than you always spent in the past and there will be a penalty if your expenditure increases, whatever the level of that expenditure, with no objective standard of fairness being applied." There has been a move to try to achieve an objective standard so that everyone is in an equal position according to the needs of the various areas. That means that traditionally low-spending authorities, most of which are Tory controlled —Tories tend not to attend to the public spending needs of those who live in their areas, but the list, to our shame, includes Birmingham—stand to gain under the change in the formula, and the cap is all about restricting the speed at which they gain.
Birmingham is suffering and the other authorities which are suffering are Tory controlled. They are the same Tory authorities that screamed when the settlement was made. The shire counties and others were screaming because they said that they were being penalised to help the inner cities. That is a joke. Birmingham is the largest area of poverty and squalor in western Europe, yet we were told that the previous RSG would help the inner cities. Birmingham has more inner city areas than anywhere else in the country, yet it is being penalised and hurt by the RSG settlement.
Conservative Members who are not in the Chamber do not do the work, do not know or do not dare to criticise their Government. They fail to represent the interests of the authorities, which would stand to gain if the Government did not legislate in such a retrospective way. It is a fairly limited group of authorities—a maximum figure of £150 million is involved — and where are Conservative Members? The mice are not here. They will not even protest on behalf of the people who live in their areas. A large proportion of Labour Members from Birmingham have been and are present in the Chamber tonight.
Let us not let the Government off the hook by the pretence that somehow, if the Rill is not passed, the whole of the past 10 years of rate support grant settlements will be unravelled. That is false and misleading. It is wrong for anyone to suggest that that is the case. Let us put that decision and the legislation in context in terms of the Government's strategy on local authority spending.
The Government were elected in 1979 on a promise to cut public expenditure and to cut taxes. They have failed on both counts. Taxes are up. More taxation is being paid now than was paid in 1979. Central Government expenditure is up significantly. It is up most significantly because unemployment is up so massively. Unemployment


is costly in terms of dole money, lost production and taxes and national insurance that the unemployed would pay if they were in work. Central Government spending is also up for defence and law and order, although we live with more crime and uncertainty than ever before in my lifetime.
The answer that the Government give to deal with the absolute failure of their economic strategy is to pass the buck to someone else. They have said to local authorities, "You will make the cut. You can keep our promises for us. You might have been elected on other manifestos and on promises to improve the quality of public services in your area, but it is too bad, we will stop you. We will change the law and fiddle the formula so that you cannot do what you promised, and so that we can pretend we are keeping in line with our promises."
All that is hidden under a smokescreen of pretence of extremism and excess in Labour local authorities. They are all full of loony Lefties spending masses of money on unnecessary things. Birmingham gives the lie to that. Birmingham is a low-spending authority, and it is being penalised by the legislation, which shows just how clearly the Government are looking for scapegoats, looking to pass the buck and looking to blame local authorities for the failures of their own economic strategies.
There are many ways in which Birmingham and low-spending Tory authorities which are not represented here tonight are being penalised. I shall run through those penalties briefly. As I have said, the Government have changed the rate support grant formula and moved away from a system of preventing growth — wherever the starting point was arbitrarily in previous years—to some kind of objective assessment of need throughout the country. Under this changed formula, Birmingham is being underpaid by £43 million. If £7 million is a lot for the people of Birmingham, £43 million is an awful lot for a city that is suffering desperately from the effects of a massive rise in unemployment and poverty.
The Government have taken powers and are using the cap and the safety net to phase in the introduction of the changed system so as not to allow cities such as Birmingham suddenly to have an increase of £43 million and to prevent other places from losing rapidly. The r j 108measure of Birmingham's objective need and loss is £43 million. That is bad enough, but the Government did not even use an objective calculation in deciding how to phase that change. They fiddled the figures. They fiddled Birmingham out of £7 million.
Birmingham took the Government to court, which said, "That is right, it is a fiddle. There is no objective foundation. It is not in line with the words of the legislation. That £7 million should not be taken away from Birmingham." The Government are trying to legalise that fiddle. That is no exaggeration. Birmingham has suffered the loss of £7 million and £43 million as a result of the Government's underpayment, on their own figures, of need.
I refer also to the scandal and the effect of the abolition of the West Midlands county council. It was claimed that it would save money, yet it has hurt Birmingham. The cost of the services transferred to Birmingham is £43 million, and the increased allocation to Birmingham to pay for those services is £6 million. We shall face an inevitable rates increase simply to maintain the services of the West

Midlands county council. That is another of the problems imposed by the Government on Birmingham, with all their fiddling of local authorities, trying to pass the buck and blaming them for the failure of their economic strategy.
Birmingham faces another problem. It has not had a rating revaluation since 1973. It has suffered savagely since 1979 because of the Government's economic policy of destroying Britain's manufacturing base. Birmingham is a manufacturing city and our capacity to pay rates has been massively reduced by increased poverty. It is assumed that our rateable values are higher than they are and that we can afford to pay amounts that we really cannot afford. The Government give us no relief but simply introduce special legislation to take away the £7 million that is owed to us under current legislation.
If we enter into the technicalities of the formula we can find worse defects, and I am sure that hon. Members will do so in Committee. Because of the way in which the Government have set the multiplier, if it overshoots at all, Birmingham — low-spending authority that it is — will suffer more than most other big cities which are spending more and looking after their people better. For example, a £1 million increase in spending in Birmingham would cost the city in penalty £1·08 million, whereas Sheffield —a city which spends well and has been complimented by the auditors on running itself efficiently—would lose only £280,000. It appears that there is a conspiracy against Birmingham, perhaps to penalise it for not having reacted to the bribe in the rate support grant in 1983–84 and for having dared to elect a Labour council.
The effect of all this on a city with the greatest geographic area of poverty in western Europe is that the Ladywood ward in the Ladywood constituency, which was redeveloped in the 1950s and 1960s, has maisonettes and tower blocks which were badly built and not properly insulated. There is a danger of pieces of those buildings falling on people as they walk along the streets. The black mould on those flats and maisonettes, which has grown because of the lack of insulation, affects the lungs of my constituents. In that part of Birmingham, a disproportionate number of children go into and out of hospital because of the effect on their lungs. There is not enough money in Birmingham to do anything about it. That is the effect of this measure and of the other cuts imposed on Birmingham. Some of my people live in squalor. Some of the children's lungs have been permanently damaged because there is not the money to put right the housing in which they live. Conservative Members should be ashamed of themselves for supporting this retrospective measure and for not being conscious of the real needs of our cities and people.

Mr. Corbett: Does my hon. Friend recall that at the present rate of improvement of degenerating housing stock in Birmingham, because of the limits on what the city is allowed to spend, it will take the city council 604 years to deal with the houses, let alone the flats and the tower blocks?
Today, the Paymaster General and Minister for Employment made a speech in Birmingham in which he told us how the Government's wonderful new task forces were helping the inner cities. He told us how they were implementing the strategy of ensuring that local labour was employed on urban renewal projects. We would support that in Handsworth, because it would mean some of our young black people could get jobs, but the truth is


that the right hon. and learned Gentleman gave a lie to the Birmingham people— there is no money any more for urban renewal. The only time that we had the money was when the Government gave the bribe. We had lots of enveloping and we built lots of walls. That was the period when none of our local young black people were employed in fixing up the houses in which they lived. We now get an announcement from the Government that they will get employment, but there is no money or projects to employ them. The Government have done very badly by the city of Birmingham in all the moves and changes they have made that I have described. The removal of the £7 million that belongs to us is a sordid marker of that history of neglect of our city.

Mr. John Watts: This evening we have witnessed one of our periodical constitutional outrage, rituals. These occur whenever there is a timetable motion before the House or whenever there is anything that can he called retrospective legislation. I think that there has been overmuch protest from the Opposition about the retrospection involved in this measure. In reality this is a fairly modest little Bill, not a major constitutional outrage, and it does nothing more than make some small and necessary running repairs to the increasingly ramshackle structure of our rate support grant system, which has proved most unsatisfactory since it first came off the production line in 1980.
One of the major problems with the existing system of grants has been the lack of certainty over grant entitlement. I know from my own experience, as the leader of a large London authority for six years, how difficult it is to indulge in any sensible long-term financial planning when, as Opposition Members have said, the goalposts can be moved so quickly and so many times within one financial year. The proposal that we should not remedy this flaw in the statute which has been detected would be to make that worse.
There is clearly a dispute between my hon. Friends on the Front Bench and Opposition Members as to whether the effect of the judgment could be to upset all rate support grant settlements back to 1981. The hon. Member for Birmingham, Hodge Hill (Mr. Davis) gave us a categorical assurance that that is not the case because he had legal advice to that effect. I would say to the hon. Gentleman that all points of law are fixed and certain until they are challenged and overturned in court. I think that that could apply just as well to the advice he has received as it must apply to the advice which my hon. Friends in the Department of the Environment had in drafting the original legislation and in its application.

Mr. Simon Hughes: Would it not do more for the Goverment's credibility with local government — I respect the hon. Gentleman's involvement in it—if on a matter such as this the Government sought to agree with local government and the perfectly respectable associations for local authorities what the legal effects of certain things would be instead of seeking to draft legislation behind their own closed doors resulting in alienation and a conflict of opinion with local government which they should be seeking to serve?

Mr. Watts: There are certain attractions in that idea. I think that the major flaw would he that there would be

no way in which the associations of local authorities could bind their individual member authorities not to pursue whatever rights they thought they had through the courts. I remind the hon. Gentleman that local authorities have operated within the Government's understanding of the law for six years. It was not until this year that there had been any challenge to the use of caps, even though, as the hon. Member for Birmingham, Ladywood (Ms. Short) reminded us, caps were also applied in 1981. Therefore, I am in favour of a more co-operative attitude between central and local government, but I do not believe that that can provide the solution in an instance such as this because there could be no way of binding all authorities to observe any agreement which might have been reached.
I accept the advice of my hon. Friend the Minister that previous years' settlements could be in doubt even though I would acknowledge that perhaps he is relying on the same legal advice as his predecessors relied upon in drafting the original Bill. Therefore, that advice may also be defective. However, on balance, I am prepared to accept my hon. Friend's advice and accept that there is a need for us to remedy this flaw in the law. After all, the Bill does no more than to confirm the situation as authorities thought it to be for six years.
The hon. Member for Hodge Hill drew an interesting analogy with the sad outcome of the England-Argentina football match last night, but he drew the wrong conclusion from it. As I see it, the situation that we face in local government finance is that, for six years, everyone has known that one cannot score a goal by bashing the ball in with one's hand, but suddenly in one match along comes a player, in this case Birmingham, who bangs the ball into the net by hand and appeals to the referee, and the latter says "Yes, that is a goal." The purpose of the legislation is to restore the rules of football as we thought they were, that one cannot score a goal by bashing the ball in by hand.
The need for the Bill provides further proof of the inadequacies of the present system. Let me mention just one of its absurdities. My Labour-controlled borough council of Slough was rewarded for having increased the borough rate by 300 per cent., from 5p in the pound in 1983 to 20p in the pound in 1985, by an increase in its rate support grant from £1·6 million to £4·6 million in the current year. I had to applaud the generosity of my right hon. Friend the Secretary of State on behalf of the minority of my constituents who are ratepayers, although, regrettably, only part of that beneficence was passed back to the ratepayers to whom it belonged. None the less, I could not try to defend the logic of a system that rewarded an authority that had been overspending, and increasing its spending at a rapid rate, particularly when that was at the expense of authorities that had sought to keep their expenditure under control, especially Conservative-controlled shire counties.
The present system is oversophisticated without being able to produce any sensible results. If, as some Opposition Members have argued, the system could be manipulated to reward the Government's political friends, I would criticise it less. If we could reward people who have the good sense to vote Conservative in general and local elections, perhaps such a system would have something to commend it. But the reality is that we have a system which, certainly this year, has rewarded the Conservative party's


enemies and penalised its friends. That is what I mean by a system that is oversophisticated but incapable of producing any sensible results.

Mr. Simon Hughes: The hon. Gentleman knows the fallacy of his argument. This year the system was used to try to reward people whom the Conservatives hoped would vote Conservative. They gave them the money and then they failed to respond. That shows how fallacious the hon. Gentleman's argument is.

Mr. Watts: If the hon. Gentleman looks at the figures for this year's settlement, he will see that the authorities that had most to gain in grant were those that were already under Labour control, not those that we were seeking to retain. However, perhaps we can pursue that matter on another occasion.
The system has also had the effect of weakening accountability because it has distorted the link between spending levels set by local authorities and the size of the rate bill that lands on the doormat. Therefore, there is an urgent need for the system to be swept away and replaced by something that would be cruder but much more readily understood. We must get away from oversophistication and go for something that is simple and certain.
The Green Paper entitled "Paying for Local Government" proposes that grant would be distributed mainly on a per capita basis. I recognise that that is not perfect, but by and large the costs that are involved in providing services are related to the total head count. In some cases, however, the major burden will be in supporting the elderly, and in other authorities it will be in providing services to the young. None the less, a per capita system would provide a fairly sensible way of distributing grant. Also, importantly, it is a system in which grant entitlement would be set before the beginning of the financial year and would not be changed, so that there could be sensible financial planning by local authorities.
Frankly, I would have preferred to see such proposals in the Bill rather than these minor running repairs which have, in the event, been presented to us. A patch here and there will hold the system together for a little while longer, but not for very much longer. Therefore, I hope that in the Gracious Speech this autumn we shall hear that the proposals to enact the changes set out in the Green Paper will be brought before us.

Mr. David Clelland: In view of the time that is available to me, I shall not try to emulate my predecessor, the late Harry Cowans, who, as the Minister implied in his opening address, had an ability to speak at great length on almost any subject. He was also very humorous.
In a recent statement to the House, the Minister referred to block grant multipliers as a complex, technical matter. That was one of many measures brought in by the Government to replace and simplify the present complex technical system of local government finance which contained such quaint features as multiple regression analysis. While "multipliers" might be a simpler expression than "multiple regression analysis", the system is no less complex than hitherto. Indeed, there are few, if any, who understand it in its entirety.
Apart from the complexity of the system, the number of changes brought about and their regularity over the past seven years has further complicated an already complex situation. It is not surprising, therefore, that, not for the first time, the Government have got it wrong and are now trying to correct the error by retrospective legislation. If this was being carried out purely in the interests of protecting councils from the damaging effects of the legal implementation of the new interpretation—it seems from what the Minister and others have said that there is some doubt about that—that, in itself, would be laudable. Even so, the Government would still stand condemned for making such a costly error in the first place and for abusing their legislative power by once again backdating the law.
The Government now intend not merely to rectify the error but to introduce new measures which further increase the already dictatorial powers of the Secretary of State and to deny Parliament and local authorities access to information which might clarify the reasons for the Secretary of State's decisions. For a Government who have recently introduced measures to allow access to information at local level, that smacks of hypocrisy of the first order. If it is fair and reasonable for local government to be open and accessible, and for people to have access to information held by local authorities, it is equally fair and reasonable for local authorities to have access to the information on which their rate support grant is calculated and the reasons behind the decisions taken by Ministers.
In paragraphs 8 and 9 of schedule 1 to the Bill, we see that the Secretary of State will be required to provide only
such explanation as the Secretary of State thinks desirable".
The Minister said that the intention is not to reduce the present levels of explanation. I assume that the Minister is aware that the Secretary of State is already inclined to release only such information as he sees fit.
Newcastle upon Tyne city council has been trying for more than a year now to extract from the Secretary of State his reasons for refusing to grant disregards to the authority in respect of the years 1983–84, 1984–85 and 1985–86. As Member of Parliament for a Newcastle constituency, I have written to the Secretary of State asking for the information requested—the Minister is present and will recall it—only to be told:
The Secretary of State does not consider that he is under any duty to explain his reasons for refusing to grant Newcastle a disregard.
The city council is convinced that its argument is fair and reasonable and is not without precedent. Therefore, it is anxious to know why its request was refused. However, the Secretary of State has refused to explain his decision. I have now tabled a parliamentary question on the matter and await a response. Should the Secretary of State persist and refuse to answer a simple question from a Member of this House, I shall he asking whether his dictatorial powers over local authorities also extend to Parliament.
This new measure may get the Government off the hook, and it will certainly increase the power of the Secretary of State, but it will do nothing to restore the lost and damaged services resulting from the Government's treatment of local government. It is an exercise in damage limitation, not restoration. It is an attempt to deny elected Members of Parliament access to information, and it will clarify little or nothing. It is a further demonstration of the Government's arrogance in assuming that they are always


right, even when they are proved wrong. It will make things even more difficult for the local authorities and increase the already unprecedented powers of the Secretary of State. For all those reasons, it deserves to be defeated.

Mr. Tony Banks: I shall be exceedingly brief, as I know that it will not be long before yet another local government Bill comes before the House. We have had almost as many Bills as we have had Secretaries of State, who also seem to come and go in the night.
It is singularly appropriate that the first major Bill brought forward by the Department under the leadership of the new Secretary of State should be a piece of retrospective legislation. The Secretary of State is uniquely qualified in this respect. Indeed, he is in danger of becoming a recidivist and should perhaps appear at the Dispatch Box in a striped jersey rather than a pin-striped suit. I remind those who do not know the Secretary of State's record on restrospective legislation of the words of Mr. Justice McNeill on the question of the GLC and payments to London Regional Transport. He said that the right hon. Gentleman, then Secretary of State for Transport, had acted "unlawfully, irrationally and … improperly". To legalise his unlawful position, the Secretary of State brought in retrospective legislation, so he has some experience in this respect.
It falls to the Department of the Environment to bring in retrospective legislation quite regularly. A previous incumbent of the office of Secretary of State, the right hon. Member for Wanstead and Woodford (Mr. Jenkin), was caught out on planning law. Whenever the Government get into bad odour as a result of poor drafting or because they wish to move the goal posts or make political capital out of a particular situation, they can use their massive majority in the House to bring in retrospective legislation to legalise their previously unlawful position.
Let hon. Members on both sides of the House contrast that attitude with the position of elected local councillors doing their job in extremely difficult circumstances. If they are found to have acted incorrectly or unlawfully, they are pilloried in the press, dragged before the courts, surcharged and have their careers and personal positions jeopardised, while Ministers simply use parliamentary sovereignty to get themselves off the hook. The hon. Member for Enfield, Southgate (Mr. Portillo) mentioned earlier cases and I referred him to the GLC "Fares Fair" policy. Everyone thought that the GLC had acted lawfully under the Transport (London) Act 1969, but when that was found not to be the case the Prime Minister refused to allow any retrospective legislation and said that the GLC would have to live with the position in which it found itself. No sympathy was shown there, but when the Secretary of State is in trouble he can come to the House and get the legislation that he needs.
The Government pledged to take Whitehall off the backs of town halls, but since 1979 there has been increasing interference in local government affairs, centralisation all the way and the constant withdrawal of central Government funds. The Government's behaviour offends all the laws of natural justice, but natural justice has no place in the ways of the Conservatives. This is yet another example of the way in which they have managed to mess up the whole of local government. The sooner we

are shot of them and can get back to some certainty in local government, the better it will be for all elected councillors and for the House of Commons.

Mr. Roland Boyes: We have heard some excellent speeches from my hon. Friends the Members for Birmingham, Hodge Hill (Mr. Davis), for Birmingham, Ladywood (Ms. Short), for Tyne Bridge (Mr. Clelland) and for Newham, North-West (Mr. Banks) about this squalid little Bill.
During my period as a councillor local government matters were becoming increasingly complex towards the latter end of the 1970s and money was beginning to be tight, but there is no doubt that what was happening then was as different from what is happening today as suffering from a dormant pimple is compared with a malignant cancer. Councils are under continuous assault from the Government, because of their interference in the decision-making processes of local authorities in a way that has never been known before. A great deal of that has been achieved by the introduction of mechanisms to control council spending policy and decision making. That is done by the manipulation of the rate support grant and by direct control, through rate capping and penalties on the sums that can be raised from rates in the community.
There is no doubt in the minds of many elected local government representatives that the Government's major objective is to influence and intrude in the processes for the determination of local government spending priorities. The Government are attempting through financial manipulation to impose their political will and philosophy on councillors who have been elected through the ballot box, especially on those from political parties who do not share their unproven monetarist economic theories.
The level of services provided by local government for housing, social services, recreation, education and a host of other functions is important for the vast majority of people, but is vital for the poor and the deprived. However, many councils cannot deliver the level of services which they consider necessary because of cuts in income. Since 1979 some £17·5 billion of rate support grant has been withheld, and there is uncertainty about future spending.
Local government officers, elected representatives and the community need a system which is equitable and straightforward, instead of the present controls, cuts, complexities and uncertainties. The Bill could have served to clarify rather than to confuse further, as it surely will.
As many hon. Members have said, local government finance is becoming so complex that the number who can understand all its aspects is rapidly being reduced to a small handful. Indeed, on 11 December 1984 the then Secretary of State for the Environment, who had told the hon. Member for Staffordshire, South (Mr. Cormack) that he would send him "A child's guide to the rate support grant system", said:
Yes, it has been very helpful to me. It has helped me to understand the system, and I am not ashamed to admit it. I think that I now understand most of it.
Later in the same answer he said:
Obviously it is complex, but my right hon. Friend the Minister for Local Government is studying its complexity." —[Official Report, 11 December 1984; Vol. 69, c. 921.]
Local government finance is becoming unintelligible because of the continual interference of successive Secretaries of State, who keep changing the rules. The Bill


is a further contribution to the problem. It is already extremely difficult to challenge decisions because of a lack of information, and the Bill gives the Secretary of State the right to make even less information available. It seeks retrospectively to correct the way in which the Government have used multipliers to minimise the effect on an authority's grant entitlement, arising from rate support grant settlements.
In principle we do not object to the use of multipliers, provided they facilitate long-term planning. As I have said, this is becoming increasingly difficult, but it is important if local authorities are to be able to be as effective and efficient as they desire. To achieve that it is essential that future income can be depended upon not to fluctuate violently up or down. The fact that there is a need within the rate support grant system for mechanisms to be devised to stabilise the inherent major fluctuations from year to year points to a fundamental defect in the system.
In the report of the Comptroller and Auditor General on the operation of the rate support grant system, paragraph 4.50 states:
The Audit Commission considered that there were too many unnecessary uncertainties in the grant system and that these had inhibited local government from planning ahead … The main uncertainties identified were the absence of forward projections of the level of grant support.
It goes on to say that the major
Fluctuations can arise for a number of reasons and in 1986/1987 multipliers were needed for the following:

(1) to limit grant losses arising from the removal of 1985/86 safety net multipliers;
(2) to limit grant gains and losses arising from the abolition of penalties and targets;
(3) to limit grant gains and losses arising from abolition, and;
(4) to limit grant losses arising from changes in GRE methodology."

That such changes in the rate support grant settlement each year produce major changes in grant entitlement has been a constant, and criticised, weakness in the system. What is required is a process that is simple but responsive to the needs of local authorities in different areas, and stable. The need to resort to multipliers, which are difficult to understand or justify, both to local authorities and the community, complicates still further the increasingly illogical and indefensible allocation of resources between authorities.
On pages 20 and 21 the report of the Comptroller and Auditor General says:
The multipliers are calculated by complex formulae, the broad purpose of which is to limit the effect on block grants of some, but not all, changes in authorities GREAs. The consequences are erratic … Because of the way in which targets have been determined over the years since 1981–82 they have no consistent relationship with current spending needs as measured by GREAs.
Three constituencies, one of which is mine, are conterminous with the borough of Sunderland, and I shall deal with an example of the consequences of using the multipliers to cap grant gains. First, I ask why the Bill is necessary. The city of Birmingham case convinced the courts that the Secretary of State had exceeded his powers in the use that he made of multipliers. The Bill gives retrospective approval to the multipliers used in the years 1982–83 to 1986–87. However, some local authorities have explained that there will he a problem in 1986–87 because of the introduction, for the first time, of grant caps. This matter should be resolved before any further action is

taken. Before the Minister tells me that to redetermine the 1986–87 multipliers will cause disruption because of the need to change the grant entitlement of all local authorities, I must tell him that, due to other Government decisions, large variations have regrettably become a fact of life to local government.
This might be a suitable point to raise a question that needs urgent consideration. The Minister will recall that in 1985 some local authorities submitted to the Department of the Environment revised figures for 1985–86. These were not requested by the Department from local authorities, but, more important, no sign was given of the consequences of not sending in the revised estimates. The Department of the Environment determined grant caps for 1986–87 on the latest available information from local authorities. Those that had not submitted revised figures for 1985–86 were found to be at a disadvantage compared to those who had submitted new data. Why and how did this occur?
If the Department of the Environment knew that this would happen, why did it not invite all local authorities to submit revised figures? Does this not mean that some local authorities are being treated more favourably than others? Will the Secretary of State invite all local authorities that have not yet done so to submit revised figures and, in addition, when he has them to hand, will he recalculate the multipliers for 1986–87? If this is not done, is there not a possibility that we might have to face further retrospective legislation because of local authorities taking action in the courts?
The fine details in the Bill will be contested in Committee. In this debate, my hon. Friends and I have simply set out our dissatisfaction with the fact that the law is being amended in this way, because retrospective legislation is, in itself, unsatisfactory, especially as it has been done, as I illustrated, during a period when multiplier calculations are being made. It is also unsatisfactory because the Bill does not do what it seeks to do— to clarify what is a far too complicated system.
Because the Bill involves retrospective legislation and will lead to greater confusion rather than to greater clarification, and because we are concerned about the fact that the Secretary of State is seeking wider powers to reduce the amount of explanation that is to be included in rate support grant reports, we shall oppose the Bill this evening.

The Parliamentary Under-Secretary of State for the Environment (Mrs. Angela Rumbold): Predictably, this evening's debate has ranged around a number of subjects. We have had a good go at the horrors of block grant, although the hon. Members for Blackburn (Mr. Straw) and for Tyne Bridge (Mr. Clelland) did not suggest that we should begin all over again with regression analysis. At least they were willing to accept that the present system has brought about some improvements. Nevertheless, they went on to tell us of immense horrors.
My hon. Friends the Members for Enfield, Southgate (Mr. Portillo), for Norwich, North (Mr. Thompson) and for Slough (Mr. Watts) said that they thought that the Government could have done better on the block grant arrangements. There was also an interesting discussion of retrospective legislation. That evoked a large number of


memories on both sides of the House. It was, if I may so describe it, a navel examination of our past mishaps regarding retrospective legislation.
A great deal of indignation has been expressed about the introduction of the Bill because of its effect on local government. Indignation was voiced by the hon. Member for Houghton and Washington (Mr. Boyes), and by the hon. Member for Newham, North-West (Mr. Banks) in his usual explicit manner. However, I shall deal with what the Bill is trying to achieve by the block grant multipliers.
Multipliers have been used in every rate support grant settlement since 1981–82 to protect local authorities from sharp losses of grant resulting from certain factors. We have always thought it right to set a limit on grant losses — I stress losses — resulting from our own decisions about the way in which grant-related expenditure assessments are calculated. In two years when there were exceptional changes in grant arrangements we have also put a limit on gains, using cap multipliers. We did that in 1981–82 when the block grant was introduced. We used caps again in the 1986–87 settlement when targets and holdback were removed to help to mitigate the results of the abolition of the Greater London council and the metropolitan county councils.
The hon. Member for Southwark and Bermondsey (Mr. Hughes) suggested that we might be legislating for the sake of it, but that is not the case. I would not want to claim that local government has always accepted the precise safety nets and caps that we have applied, but there has always been a good deal of agreement over the way in which caps and nets should be set. We have been fairly proud of this.
I intend to deal in more detail with some of the points that have been raised on caps, safety nets, retrospection and other matters. It has been suggested by a number of hon. Members that the reason for the 1986–87 multipliers being challenged is that the cap on grant gains operated unfairly on some authorities, especially Birmingham. I do not accept that argument. There are two sorts of caps.
First, we made it clear in July 1985 that we thought it was right to limit windfall gains resulting from our decision to dispense with targets and holdback for 1986–87. I remind the House that that decision was welcomed. That was surely perfectly reasonable. I see no reason why some authorities should be allowed to benefit from unlimited gains at the expense of all other authorities.
The second type of cap applied to the effects of abolishing the GLC and the metropolitan county councils. We made it clear on many occasions that we thought that abolition should be neutral in its effect on ratepayers. Again, I can see no argument why ratepayers in some areas should have benefited from the fact of abolition, while others suffered losses.
The hon. Member for Birmingham, Ladywood (Ms. Short) asked whether Birmingham would receive the additional grant that it was seeking for 1986–87. Birmingham challenged the cap multiplier determined for it in the 1986–87 settlement. The main grounds for the challenge were in the legal shortcomings in the existing legislation, which this Bill is designed to correct. There was no challenge to the reasonableness of the cap.
I want to explain the point that the hon. Lady tried to make during a number of interventions about the way that

the cap operates. Section 59(6)(a) contains the power to determine cap and net multipliers and provides that they may he determined for
limiting the change in the amount of block grant payable to an authority for the year from the amount payable in the previous year.
Before the Secretary of State can exercise the power to cap, he must be satisfied that there would have been an unreasonable increase in the amount of grant payable unless he exercised that power. Whether he nets or caps, the Secretary of State is limiting the amount of grant payable year on year and there is no difference in the nature of the power. If it was not exercised properly for Birmingham on the basis of a year by year comparison for caps, it was not exercised properly for nets. Therefore, the power is exercisable on the basis of the principles applicable to all authorities. If it is invalid for one authority, it is equally invalid for any other authority that has had a cap or net multiplier determined for it.

Mr. Nick Raynsford: Does the Minister accept that this extraordinary complexity, with a need for all these parentheses and adjustments, simply illustrates the total nonsense of the framework for local government finance operated by this Government?

Mrs. Rumbold: I am sorry that the hon. Gentleman finds this so difficult. It is a complex matter. I am sure he understands that it needs careful explanation to the House.

Ms. Clare Short: I am sure that the Minister does not mean to obfuscate about how the £7 million figure arises for Birmingham. The Secretary of State estimated a base grant of £158 million for 1985–86 using contrived assumptions, whereas his own projected grant entitlement for 1985–86 was expected to be £165·2 million. The difference between those two amounts means that Birmingham has lost £7 million. It is to do with reasonableness. It is not simply an accident in calculation such as the Minister appeared to imply.

Mrs. Rumbold: I shall come to the detail of that in a moment. The fact is that in the settlement Birmingham stood to gain substantially from the removal of targets and holdback. Birmingham ratepayers also stood to gain from the abolition of the West Midlands county council. If no cap had been applied, Birmingham's grant would have soared from the £165 million it was being paid for 1985–86 to as much as £224 million. That gain, of course, would have been at the expense of all other authorities.
We took the view that windfall gains were undesirable, and we therefore put a limit on those gains, with the result that Birmingham's grant settlement was about £185 million, but that was still about £20 million more than it was actually being paid for 1985–86.

Mr. Straw: Does the Minister accept that, while it is generally accepted by local authorities and the Department that for the purpose of setting safety nets notional spending is acceptable, for the purpose of setting caps the Department has previously always taken the difference between actual spending in one year and actual spending in the following year?

Mrs. Rumbold: I can explain to the hon. Gentleman why we did it a little differently this year.
I wish to deal now with the matter of safety nets. We tried to achieve a balanced package of nets and caps. The safety net protected individual authorities that would otherwise have suffered sharp losses, and the caps


prevented large gains for individual authorities at the expense of all other authorities. The hon. Member for Southwark and Bermondsey asked me to name other authorities that would have had large gains. I shall turn that question around because, while attention has been focused understandably on the authorities that have been capped, it is also important to remember the other side of the coin. If we had not applied the safety nets, Bedfordshire county council would have lost a further £8 million of grant, Surrey county council would have lost a further £10 million of grant, in London, Greenwich borough council would have lost a further £20 million and Tower Hamlets would have lost no less than £59 million. If we had done nothing to correct the shortcomings of the law, the basis of this protection would have gone and those authorities would have faced unmanageable losses of grant, as I am sure the hon. Gentleman will acknowledge.

Mr. Simon Hughes: rose—

Mrs. Rumbold: No, I shall not give way. I must get on.
The hon. Gentleman also asked whether the 1986–87 safety net and cap multipliers would be redetermined in the light of later information. The hon. Member for Houghton and Washington also mentioned that matter. That point has also been raised by other people and authorities. Since the budgets for 1985–86 have been revised, it is believed that if the settlement multipliers were recalculated on the new figures the authorities would get more grant than they are currently receiving in 1986–87, as the hon. Gentleman said. Therefore, the Bill makes it completely clear that safety nets and caps are to be calculated once and for all at settlement time. The Secretary of State will no longer have the power to redetermine multipliers and to set nets and caps, except to correct errors in the original calculations. Of course, Ministers will be prepared to meet representatives of Avon county council at a mutually convenient time.
As my hon. Friend the Minister mentioned, there are a number of cases where one could quote retrospective law: the Law of Property (Joint Tenants) Act 1964, which amended the law with respect to land invested in joint tenants, the Housing Finance (Special Provisions) Act 1975 — all introduced by a Labour Government — the Aircraft and Shipbuilding Industries Act 1977, and the one I like the best, the Indian Divorces (Validity) Act 1921. That was passed to remedy the consequences of the decision in the case of Keyes v Keyes. A number of persons who thought they had been divorced in India were not divorced at all, so those who subsequently remarried were guilty of bigamy. The Act retrospectively validated such divorces. As the hon. Member for Blackburn talked about expectations, I ask him whether those expectations might have been dashed—

Mr. Straw: rose—

Mrs. Rumbold: No, I shall not give way.
On a more serious note, I do understand that retrospective legislation always smacks of moving the goalposts after the start of the game. But I must tell the hon. Member for Birmingham, Hodge Hill (Mr. Davis) and my hon. Friend the Member for Slough, who pinched my point about moving the goalposts, that the RSG

settlements for each year between 1981–82 and 1986–87 were made according to an interpretation of the law which was widely accepted.
Grant entitlements for previous years are at risk because we still have to make supplementary reports for the rest of the years in question. Those reports would necessarily involve the use of the multiplier powers which, as we have explained, would have to be recalculated in the way required by the Birmingham judgment and thus create total uncertainty as to grant entitlements if we did not have the Bill.
The rules for judicial review provide that proceedings must be commenced as soon as possible, and in any case within three months of the decision complained of. A decision on a multiplier in, for example, the fourth supplementary report for 1983, to be laid at a future date, could enable a local authority to challenge the original determination of the multiplier in the main report for that year.
I was asked about the London borough of Greenwich. That error arose from a misallocation in the RSG settlement for 1986–87 of inherited highways expenditure. [Interruption.] We have suggested that a safety net of 2p at ratepayer level would be appropriate—the equivalent of about £290,000 for Greenwich. No final decision has been taken on the level at which the safety net should be set and we shall consider all representations, including those from Greenwich, before reaching a final decision —[Interruption.]

Mr. Speaker: Order.

Mrs. Rumbold: As my hon. Friend the Member for Slough has said, unfortunately serious shortcomings have been identified in the existing law on block grant multipliers. It is for that reason we have brought the Bill before the House this evening. I ask the House to support the Bill.

Mr. Tony Banks: On a point of order, Mr. Speaker. Is it in order for hon. Members who have not attended the debate to come into the Chamber late and to spend all their time talking and gossiping during the Minister's concluding speech?

Mr. Speaker: There was as much noise inside the Chamber as at the Bar of the House.

Question put, That the Bill be now read a Second time:—

The House divided: Ayes 246, Noes 180.

Division No. 231]
[10.00 pm


AYES


Adley, Robert
Boscawen, Hon Robert


Aitken, Jonathan
Bottomley, Peter


Alexander, Richard
Bottomley, Mrs Virginia


Ancram, Michael
Bowden, A. (Brighton K'to'n)


Arnold, Tom
Bowden, Gerald (Dulwich)


Ashby, David
Boyson, Dr Rhodes


Atkins, Robert (South Ribble)
Braine, Rt Hon Sir Bernard


Baker, Nicholas (Dorset N)
Bright, Graham


Banks, Robert (Harrogate)
Brinton, Tim


Batiste, Spencer
Brooke, Hon Peter


Beaumont-Dark, Anthony
Brown, M. (Brigg &amp; Cl'thpes)


Bellingham, Henry
Bruinvels, Peter


Bendall, Vivian
Bryan, Sir Paul


Benyon, William
Buchanan-Smith, Rt Hon A.


Biffen, Rt Hon John
Buck, Sir Antony


Biggs-Davison, Sir John
Budgen, Nick


Blackburn, John
Bulmer, Esmond


Blaker, Rt Hon Sir Peter
Burt, Alistair


Bonsor, Sir Nicholas
Butcher, John






Butler, Rt Hon Sir Adam
Lloyd, Peter (Fareham)


Carlisle, John (Luton N)
Lord, Michael


Carlisle, Kenneth (Lincoln)
Luce, Rt Hon Richard


Carttiss, Michael
Lyell, Nicholas


Cash, William
McCrindle, Robert


Chalker, Mrs Lynda
McCurley, Mrs Anna


Chapman, Sydney
Macfarlane, Neil


Chope, Christopher
MacGregor, Rt Hon John


Clark, Dr Michael (Rochford)
Madel, David


Clark, Sir W. (Croydon S)
Major, John


Clarke, Rt Hon K. (Rushcliffe)
Malins, Humfrey


Clegg, Sir Walter
Maples, John


Cockeram, Eric
Marland, Paul


Colvin, Michael
Marlow, Antony


Conway, Derek
Marshall, Michael (Arundel)


Cope, John
Mates, Michael


Corrie, John
Mawhinney, Dr Brian


Couchman, James
Maxwell-Hyslop, Robin


Cranborne, Viscount
Mayhew, Sir Patrick


Currie, Mrs Edwina
Mellor, David


Dickens, Geoffrey
Meyer, Sir Anthony


Dicks, Terry
Miller, Hal (B'grove)


Dorrell, Stephen
Mills, Iain (Meriden)


Douglas-Hamilton, Lord J.
Miscampbell, Norman


Dover, Den
Mitchell, David (Hants NW)


du Cann, Rt Hon Sir Edward
Moate, Roger


Dunn, Robert
Montgomery, Sir Fergus


Durant, Tony
Morris, M. (N'hampton S)


Dykes, Hugh
Moynihan, Hon C.


Edwards, Rt Hon N. (P'broke)
Mudd, David


Eggar, Tim
Murphy, Christopher


Emery, Sir Peter
Neale, Gerrard


Evennett, David
Needham, Richard


Eyre, Sir Reginald
Nelson, Anthony


Fallon, Michael
Neubert, Michael


Farr, Sir John
Newton, Tony


Fletcher, Alexander
Nicholls, Patrick


Fookes, Miss Janet
Norris, Steven


Forman, Nigel
Onslow, Cranley


Forsyth, Michael (Stirling)
Oppenheim, Phillip


Forth, Eric
Oppenheim, Rt Hon Mrs S.


Fox, Sir Marcus
Osborn, Sir John


Fraser, Peter (Angus East)
Ottaway, Richard


Garel-Jones, Tristan
Page, Sir John (Harrow W)


Glyn, Dr Alan
Page, Richard (Herts SW)


Gorst, John
Patten, Christopher (Bath)


Gow, Ian
Patten, J. (Oxf W &amp; Abgdn)


Gower, Sir Raymond
Pawsey, James


Grant, Sir Anthony
Percival, Rt Hon Sir Ian


Greenway, Harry
Porter, Barry


Griffiths, Sir Eldon
Portillo, Michael


Gummer, Rt Hon John S
Powell, William (Corby)


Hamilton, Hon A. (Epsom)
Powley, John


Hanley, Jeremy
Price, Sir David


Hawkins, Sir Paul (N'folk SW)
Proctor, K. Harvey


Heddle, John
Raffan, Keith


Heseltine, Rt Hon Michael
Rathbone, Tim


Higgins, Rt Hon Terence L.
Rees, Rt Hon Peter (Dover)


Hill, James
Rhodes James, Robert


Hind, Kenneth
Rhys Williams, Sir Brandon


Hogg, Hon Douglas (Gr'th'm)
Ridley, Rt Hon Nicholas


Holland, Sir Philip (Gedling)
Ridsdale, Sir Julian


Hordern, Sir Peter
Rippon, Rt Hon Geoffrey


Howarth, Gerald (Cannock)
Roberts, Wyn (Conwy)


Howell, Rt Hon D. (G'ldford)
Robinson, Mark (N'port W)


Hunter, Andrew
Rossi, Sir Hugh


Jackson, Robert
Rost, Peter


Jessel, Toby
Rowe, Andrew


Joseph, Rt Hon Sir Keith
Rumbold, Mrs Angela


Key, Robert
Ryder, Richard


Knowles, Michael
Sackville, Hon Thomas


Latham, Michael
Sainsbury, Hon Timothy


Lawrence, Ivan
Shaw, Giles (Pudsey)


Lee, John (Pendle)
Shelton, William (Streatham)


Leigh, Edward (Gainsbor'gh)
Shepherd, Richard (Aldridge)


Lennox-Boyd, Hon Mark
Sims, Roger


Lester, Jim
Skeet, Sir Trevor


Lewis, Sir Kenneth (Stamf'd)
Smith, Sir Dudley (Warwick)


Lilley, Peter
Soames, Hon Nicholas


Lloyd, Sir Ian (Havant)
Speed, Keith





Speller, Tony
Van Straubenzee, Sir W.


Spencer, Derek
Vaughan, Sir Gerard


Spicer, Jim (Dorset W)
Viggers, Peter


Squire, Robin
Waddington, David


Stanbrook, Ivor
Waldegrave, Hon William


Steen, Anthony
Walker, Bill (T'side N)


Stern, Michael
Wall, Sir Patrick


Stevens, Lewis (Nuneaton)
Waller, Gary


Stewart, Allan (Eastwood)
Wardle, C. (Bexhill)


Stewart, Andrew (Sherwood)
Warren, Kenneth


Sumberg, David
Watson, John


Taylor, John (Solihull)
Watts, John


Taylor, Teddy (S'end E)
Wells, Bowen (Hertford)


Tebbit, Rt Hon Norman
Wells, Sir John (Maidstone)


Temple-Morris, Peter
Wheeler, John


Terlezki, Stefan
Whitney, Raymond


Thomas, Rt Hon Peter
Wilkinson, John


Thompson, Donald (Calder V)
Winterton, Mrs Ann


Thompson, Patrick (N'ich N)
Winterton, Nicholas


Thorne, Neil (Ilford S)
Wood, Timothy


Thornton, Malcolm
Yeo, Tim


Thurnham, Peter
Young, Sir George (Acton)


Townend, John (Bridlington)



Tracey, Richard
Tellers for the Ayes:


Trippier, David
Mr. Francis Maude and


Twinn, Dr Ian
Mr. Gerald Malone.


NOES


Abse, Leo
Dormand, Jack


Adams, Allen (Paisley N)
Douglas. Dick


Alton, David
Duffy, A. E. P.


Archer, Rt Hon Peter
Eadie, Alex


Ashdown, Paddy
Eastham, Ken


Ashley, Rt Hon Jack
Edwards, Bob (W'h'mpt'n SE)


Ashton, Joe
Evans, John (St. Helens N)


Atkinson, N. (Tottenham)
Fatchett, Derek


Bagier, Gordon A. T.
Faulds, Andrew


Banks, Tony (Newham NW)
Field, Frank (Birkenhead)


Barnett, Guy
Fields, T. (L'pool Broad Gn)


Barren, Kevin
Fisher, Mark


Beckett, Mrs Margaret
Flannery, Martin


Beith, A. J.
Forrester, John


Benn, Rt Hon Tony
Foster, Derek


Bennett, A. (Dent'n &amp; Red'sh)
Fraser, J. (Norwood)


Bermingham, Gerald
Freeson, Rt Hon Reginald


Bidwell, Sydney
Garrett, W. E.


Blair, Anthony
George, Bruce


Boothroyd, Miss Betty
Gilbert, Rt Hon Dr John


Boyes, Roland
Golding, John


Bray, Dr Jeremy
Gould, Bryan


Brown, Gordon (D'f'mline E)
Gourlay, Harry


Brown, N. (N'c'tle-u-Tyne E)
Hancock, Michael


Brown, Ron (E'burgh, Leith)
Hardy, Peter


Bruce, Malcolm
Harman, Ms Harriet


Buchan, Norman
Harrison, Rt Hon Walter


Callaghan, Jim (Heyw'd &amp; M)
Hart, Rt Hon Dame Judith


Campbell, Ian
Hattersley, Rt Hon Roy


Carlile, Alexander (Montg'y)
Heffer, Eric S.


Carter-Jones, Lewis
Hogg, N. (C'nauld &amp; Kilsyth)


Clark, Dr David (S Shields)
Home Robertson, John


Clarke, Thomas
Howeils, Geraint


Clay, Robert
Hoyle, Douglas


Clelland, David Gordon
Hughes, Robert (Aberdeen N)


Clwyd, Mrs Ann
Hughes, Roy (Newport East)


Cocks, Rt Hon M. (Bristol S)
Hughes, Simon (Southwark)


Cohen, Harry
Janner, Hon Greville


Conlan, Bernard
Jenkins, Rt Hon Roy (Hillh'd)


Cook, Frank (Stockton North)
John, Brynmor


Corbett, Robin
Jones, Barry (Alyn &amp; Deeside)


Corbyn, Jeremy
Kaufman, Rt Hon Gerald


Cox, Thomas (Tooting)
Kilroy-Silk, Robert


Craigen, J. M.
Kirkwood, Archy


Crowther, Stan
Lambie, David


Cunliffe, Lawrence
Leadbitter, Ted


Cunningham, Dr John
Leighton, Ronald


Davis, Terry (B'ham, H'ge H'I)
Lewis, Ron (Carlisle)


Deakins, Eric
Lewis, Terence (Worsley)


Dewar, Donald
Litherland, Robert


Dixon, Donald
Lloyd, Tony (Stretford)


Dobson, Frank
Lofthouse, Geoffrey






Loyden, Edward
Robertson, George


McCartney, Hugh
Robinson, G. (Coventry NW)


McDonald, Dr Oonagh
Rowlands, Ted


McGuire, Michael
Ryman, John


McKelvey, William
Sedgemore, Brian


MacKenzie, Rt Hon Gregor
Sheerman, Barry


McNamara, Kevin
Sheldon, Rt Hon R.


McTaggart, Robert
Shore, Rt Hon Peter


McWilliam, John
Short, Ms Clare (Ladywood)


Madden, Max
Short, Mrs R.(W'hampt'n NE)


Marek, Dr John
Silkin, Rt Hon J.


Marshall, David (Shettleston)
Skinner, Dennis


Martin, Michael
Smith, Cyril (Rochdale)


Mason, Rt Hon Roy
Snape, Peter


Maxton, John
Soley, Clive


Maynard, Miss Joan
Spearing, Nigel


Meadowcroft, Michael
Stott, Roger


Michie, William
Strang, Gavin


Millan, Rt Hon Bruce
Straw, Jack


Miller, Dr M. S. (E Kilbride)
Thomas, Dafydd (Merioneth)


Morris, Rt Hon A. (W'shawe)
Thomas, Dr R. (Carmarthen)


Morris, Rt Hon J. (Aberavon)
Thompson, J. (Wansbeck)


Nellist, David
Thorne, Stan (Preston)


O'Brien, William
Torney, Tom


O'Neill, Martin
Wainwright, R.


Orme, Rt Hon Stanley
Wallace, James


Park, George
Wareing, Robert


Parry, Robert
Weetch, Ken


Patchett, Terry
Welsh, Michael


Pavitt, Laurie
White, James


Penhaligon, David
Wigley, Dafydd


Pike, Peter
Williams, Rt Hon A.


Powell, Raymond (Ogmore)
Winnick, David


Prescott, John
Woodall, Alec


Radice, Giles
Wrigglesworth, Ian


Randall, Stuart
Young, David (Bolton SE)


Raynsford, Nick



Rees, Rt Hon M. (Leeds S)
Tellers for the Noes:


Richardson, Ms Jo
Mr. Chris Smith and


Roberts, Ernest (Hackney N)
Mr. Ron Davies.

Question accordingly agreed to.

Bill read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 42 (Committal of Bills).

Lord Chancellor (Salary)

The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I beg to move,
That the draft Lord Chancellor's Salary Order 1986, which was laid before this House on 3 June, be approved.
As the title of the order before us suggests, it is concerned only with the salary proposed for the Lord Chancellor. This arrangement for setting the amount payable to the Lord Chancellor is of only recent origin. I shall turn later to our past consideration of the order. First, I propose to deal with the order itself. I hope that it may then be helpful if I say a few words to remind the House why the Lord Chancellor's salary, uniquely among ministerial salaries, is fixed in this way.
The terms of the order are quite straightforward. They provide for the revocation of the Lord Chancellor's Salary Order 1985 and for an increase of £2,400 in the salary payable to the Lord Chancellor. This would have effect from 8 July this year, and would raise the amount due from £77,000 per year to £79,400. This order is needed because of the—

Mr. Dave Nellist: Does the Leader of the House recall the many debates that we have had in recent weeks on wages councils? The £2,400

increase in the Lord Chancellor's salary is precisely the annual salary of young workers in hotels, shops, catering establishments and hairdressing establishments, which Ministers considered too high and argued should be cut. How can the right hon. Gentleman justify an increase in one year in one Minister's salary which is the same as the annual salary of young workers who are told that they are pricing themselves out of jobs?

Mr. Biffen: If the hon. Gentleman had fully acquainted himself with the recommendations of the Top Salaries Review Body—I am sure that he has—he would realise why the sums to which I referred are included in the order.
The order is needed because of the link between the salary of the Lord Chief Justice and that payable to the Lord Chancellor. This link between the two salaries dates back to 1983. Before that time, the Lord Chief Justice and the Lord Chancellor were paid the same amount. In 1983, however, the TSRB departed from its previous recommendations in this respect. Its report concluded that
having regard to the pre-eminent position of the Lord Chancellor in the judiciary and his responsibilities as a whole … a more appropriate relationship would be established if he were paid rather more than the Lord Chief Justice.
The principle of this recommendation was accepted by the Government and has since been accepted by the House. I believe that it represents a most appropriate way of taking into account the different roles of the Lord Chancellor in presiding over the other place, in being a Minister and head of a Department and in being the constitutional head of the judiciary. It does mean, however, that the Lord Chancellor's salary has to obtain the agreement of both Houses annually, while the salaries for Ministers and other office holders can be set for four years at a time. Although this may seem a cumbersome and complicated way of proceeding, there is no obvious simple alternative which would remove this requirement yet retain the link.
The Lord Chief Justice's salary is settled annually when the Government decide what action to take to implement the recommendations of the Top Salaries Review Body. This year my right hon. Friend the Prime Minister announced on 22 May how the Government proposed to act in respect of both the TSRB and the other review bodies which report annually.
In respect of the TSRB, the Government decided that the recommendation should be scaled down somewhat to an average 4 per cent. to take effect from 1 July 1986. This means that the effective increase in the pay for this group in 1986–87 is 3 per cent.— broadly in line with inflation. From 1 July, the Lord Chief Justice will thus receive an increase of £2,400 which raises his salary from £75,000 to £77,400.
The House can see from this that the terms of the order reflect very closely the change to the Lord Chief Justice's salary —the difference remaining being the £2,000 more which is payable to the Lord Chancellor.

Mr. Gerald Bermingham: Does the right hon. Gentleman agree that, when we talk of 10 per cent. of £100 and 10 per cent. of £10,000, the percentage is equal but the sums involved are different? Would it not be fair, at the top end of the scale, to award a sum of money rather than a percentage? When percentages are allowed, the rich get richer and those at the bottom do not keep up quite so much.

Mr. Biffen: I think that the hon. Gentleman suggests a proposal which would effectively narrow the differentials


within the pay scales concerned. The recommendations made by the Top Salaries Review Body, which was accepted by the Government, maintains, broadly speaking, the differential arrangements. I think that the House would wish to be careful before producing salary arrangements which further depress differentials in that instance and, in my view, more generally.
The modalities of this arrangement mean that this is the fourth time that the issue has come before the House since this formula was devised in 1983. In that year, the Lord Chancellor's salary was like those of other office holders, set out in the Ministerial and Other Salaries Order. This was approved by the House on 26 July of that year without a Division. The following year, the Lord Chancellor's Salary Order was taken on 20 July with motions relating to Members' office, secretarial and research allowance and the motor mileage allowance. On that occasion, the right hon. Member for Swansea, West (Mr. Williams) and I had the distinction of being the only two contributors to the debate to comment on the Lord Chancellor's salary.

Mr. Anthony Beaumont-Dark: Those of us who do not have the pleasure of being lawyers do not understand the great difference between the Lord Chancellor and the rest of us crude politicians. The Lord Chancellor may, in some theoretical way, be head of the judiciary, but he is at heart a politician who, at the Prime Minister's wish, or displeasure, is possessed or dispossessed of office. Why does the Prime Minister get one sum of money, because she is Head of the Government, but judges, Lord Chancellors and barristers who are politicians as well argue that they are on Olympian heights? Why does the Lord Chancellor, as one of the members of the Government, need to give a wretched example to the rest of the people by needing £79,400 a year? That must be nonsense and wrong, and most of us could not support it.

Mr. Biffen: My hon. Friend made precisely that point last year, only more briefly.

Mr. Beaumont-Dark: I shall make it every year.

Mr. Biffen: My hon. Friend implied that the Lord Chancellor was a "crude politician"—I noted the words carefully. The Lord Chancellor's warmest friend and his most inveterate opponent would concede that he is a man of the utmost political distinction. But he has legal responsibilities. The legal responsibilities of his office were argued a few years ago in the reports of the Top Salaries Review Body. I can do no better than commend them to my hon. Friend.
Once again, the 1984 order could hardly be said to be controversial and the right hon. Member for Swansea, West said that the Opposition would not oppose the motion. Although the House did divide on the issue, the order was passed with the significant majority of 108 votes to 14.

Mr. Bermingham: What about last year?

Mr. Biffen: I think that the hon. Gentleman, who makes that comment gracefully but sedentarily—

Mr. Bermingham: rose—

Mr. Biffen: It is all right, there is no need for the hon. Gentleman to make the point at greater length. I think that we all recollect—none more so than me—that there was an understandable elasticity to the debate last year. It

considered not so much the Lord Chancellor's salary as the political wisdom of behaving in the way in which the Government did with respect to the Top Salaries Review Body's report.

Mr. Bermingham: rose—

Mr. Biffen: I hope that the hon. Gentleman will allow me to continue.
I accept at once that our debate on this order last year was different both in character and in the level of interest it aroused. This, I believe, owed much to the fact that the debate was used by the House to express its views about the Government's implementation of the TSRB's overall recommendations. This evening, I believe— I think that I still believe—that we are in a calmer situation. Indeed, we may well remind ourselves that the only issue before us tonight is whether to approve the order. On previous occasions, the House has clearly shown its acceptance of the principle behind this order and, in these circumstances, I believe that it would be perverse to oppose the mechanism needed to implement what has already been approved. I commend the motion to the House.

Mr. Peter Shore: This is an important debate, even though we are discussing the tip of the iceberg of public sector pay. Indeed, when the history of the decline and fall of the second Thatcher Government comes to be written, I am sure that last year's debate on the Lord Chancellor's salary order will have a special place.
As the House will recall, that event had a double significance. First, in seeking the approval of the House for a 16·6 per cent. increase in the Lord Chancellor's pay, taking his salary from £66,000 to £77,000 per year, the Government demonstrated more clearly than on any previous occasion that they were operating a manifestly unfair and totally contradictory incomes policy, with high monetary increases for the most favoured, those covered by the Top Salaries Review Body, with a 3 per cent. norm for the great bulk of public sector employees, with 5 to 6 per cent. for nurses and teachers, and a deliberate policy of pay reduction for the lowest paid, those covered by wages councils. Secondly, on that occasion over 411 Tory Back Benchers voted with the Opposition against the Government, and many more abstained. The order was passed by 249 votes to 232, a majority of 17. Although the order was discussed after 10 o'clock, the Lord Privy Seal and myself spoke to a nearly full House of Commons.
This year we have a somewhat less tense situation, with an attendance, I would guess, of about 50 hon. Members. We have a very different order and a very different background of public sector pay decisions. The nurses, the doctors and the armed forces were all recommended by their pay bodies increases of between 7·5 and 8·2 per cent. from this April. The Government have simply reduced that by the expedient of postponing payment from 1 April to 1 July, thus cutting the pay increase of the groups this year to 5 to 6 per cent.
The Top Salaries Review Body, which recommended an average of 6·5 per cent. increase, is to be more severely reduced to an average of about 3 per cent. Thus, the Lord Chancellor's salary, which, by recent convention, as the Lord Privy Seal reminded us, is linked to that of the Lord Chief Justice and should stand at £2,000 above his, would


have been £81,000 today if the Government had accepted the Top Salaries Review Body recommendation. The order before us contains the lower figure of £79,400, an increase of 3·1 per cent. not the 5·2 per cent. that was recommended.
The House knows that, like last year, the Lord Chancellor does not want the increase and will not take it anyway. However, the Government's reasons for departing this year from the course they pursued last year does need some examination and explanation. According to the Top Salaries Review Body report, paragraph 30, the basis of its award was as follows:
Last year we were concerned to establish the appropriate structure and salary levels; our aim this year is to keep them up to date.
Taking account of comparator increases the report says:
we consider that salary increases for the groups in our remit should this year be near the lower quartile of increases for the comparators rather than the median.
Inevitably, the question arises why last year the Government insisted on the 16·6 per cent. increase recommended by the Top Salaries Review Body, when this year they recommend only three fifths of what has now been recommended.
Last year when replying to our debate the Lord Privy Seal was emphatic that
these great issues of top people's pay, which are full of great political difficulty, are best vested for their recommendation in an outside body such as the Top Salaries Review Body.
He concluded with the bold and defiant words:
Whatever timing is resolved, it is always a matter of embarrassment and acute unease … There is no easy way out of this or any of the other major issues of politics. We are not here to hide behind any passing popular fashion. We are here to provide leadership as well. I do not resile from that observation. We are not in the business of paving-stone politics on this or anything else. Confronted with these difficulties, it is our obligation to give a lead and not to cringe and follow."—[Official Report, 23 July 1985; Vol. 83, c. 1008–9.]
This year the Lord Privy Seal has struck a very different chord. It is not so much the trumpet as the tin whistle; it is the Government who must now determine top salaries, not the TSRB—the despised and rejected alternative of what the right hon. Gentleman described last year as politically decided pay determination. Quite simply, I applaud the change. I welcome the right hon. Gentleman in his present mood and presentation. I pay tribute to the revolting Back Benchers of last year, who helped the Opposition to drive it home to the Government that manifest unfairness in public sector pay determination is simply unacceptable.

Mr. Derek Conway: The right hon. Gentleman rightly refers to the Government's stance the last time we debated the issue. Will he say whether the 40 Conservative Members who went against the party line on that occasion will have more support from Her Majesty's Opposition this time than last time?

Mr. Shore: I shall come to that. Nothing that happens tonight should detract in any way from the warm tribute that we all wish to pay to the revolting Back Benchers of last year. [Interruption.] I was there voting with them.
Before I conclude, I want to draw attention to a longer-term problem that is rapidly emerging. The Lord Privy Seal must be aware, as is the House, of the pay explosion that is taking place in top salaries in the private sector. On

15 June 1986 The Sunday Times published its annual survey of salary increases of industries' top earners. It reported:
the top 100 received an average pay increase of 28 per cent. last year. With 5 per cent. inflation at the end of last year and earnings increasing by about 7·5 per cent. they did very nicely in the wages battle. Their average salary is £188,000 per annum.
It is not just in the top levels that the pay explosion is taking place. During the past year, as the City has prepared for this autumn's big bang, the financial services sector has massively increased no only salaries but a whole range of fringe benefits. In the vocabulary of pay increases, the golden hello has now taken place alongside the golden handshake. What is unique to top salaries in the private sector is that they are self-determined. It is the chief executives and the boards of directors of companies who determine their own worth and their own rewards.
I shall not vote against the order, but I conclude with a warning to the Government.

Mr. Beaumont-Dark: Will the right hon. Gentleman give way?

Mr. Shore: No, I will not.
The Government will need to look again very closely at the whole workings of the TSRB, if we are to avoid next year or the year after another huge and unacceptable increase in public sector top salaries, propelled upwards to ever more dizzy heights by the explosion in private sector comparator pay.

Mr. Gerald Bermingham: It may be that my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) will not vote against the order, but I shall. I hope that many other hon. Members will. Again we see in this award the way in which the Top Salaries Review Body reacts. I take on board what was said by my right hon. Friend about the private sector. It reflects much that is wrong in our society.
I do not object to the principle of quantum meruit—the labourer being paid as much as he deserves. What I object to is the little cartel that we see, which gleans a lot for the few, and ignores the many. I object when that occurs in the public and private sectors. In the private sector, as my right hon. Friend said, we have seen it in the City, with the golden hello and the golden goodbye. People are beginning to move from here to there, with a hello and a goodbye, and a hello and a goodbye. A vast amount of money goes into their hands, and a vast amount of money is taken out of society, which could have been paid to those who work in those organisations.
I accept that tonight's debate is about the Lord Chancellor's salary. I hope that any comment that I make will not be taken personally.

Mr. David Ashby: Will the hon. Gentleman give way?

Mr. Bermingham: I shall give way in a moment.
I apply to the Lord Chancellor the same argument of quantum meruit as I apply to any one else who is governed by the Top Salaries Review Body.

Mr. Ashby: On the hon. Gentleman's theme that a labourer is worth his pay, has he any comment to make on the fact that the pay increase for the Lord Chancellor is a little less than that which he originally intended giving


to the Bar before that was stopped? I understand that the hon. Gentleman is a member of the Bar. Has he any comment to make on that point?

Mr. Bermingham: It is well known that I am a member or the legal profession. I hope not to bring the legal profession into dispute over the question of the Lord Chancellor's pay review. I have not sought to do that. The hon. Member for Leicestershire, North-West (Mr. Ashby) is also a practising barrister and he may be egging me on to suggest that perhaps the rule of quantum meruit ought to be applied to the Lord Chancellor in respect of his determination in relation to the legal aid apportionments. Had a little more realism been shown in that respect, perhaps many members of the legal profession would have and could have said that they felt that the administrative part of the Lord Chancellor's occupation was properly performed.
I must not trespass down that road too far as I realise that many hon. Members would bring me to order for doing so. It would detract from the principle that I seek to advance tonight.

Mr. Ashby: Does the hon. Gentleman not agree with this if he thinks that the Bar is worth more than was originally offered—and I am sure that that is his view—is the Lord Chancellor not worth the increase offered in the review?

Mr. Bermingham: The hon. Gentleman has missed the point. I am not trying to debate the merits of the Bar's case—which I fully support. I seek to debate whether the Top Salaries Review Body, in fixing the Lord Chancellor's salary—which is the notional subject of the debate—and in fixing the salary levels of many other senior civil servants and public office holders, has the right criteria. I immediately concede that those who serve in the judiciary need to be adequately paid, just as those who serve in the judiciary ought to be properly paid when they seek to administer justice in one form or another. Perhaps the Leader of the House will listen carefully to my next point. If those who serve justice — whether they be solicitor, clerk, articled clerk, pupil barrister or whatever, are not properly paid, justice will suffer.

Mr. Bill Michie: What about the workers?

Mr. Bermingham: I should like to return to the concept of how we fix public sector payments. If we take the basic principle of what is needed by way of salary matters, we must consider how they apply. I concede that I am concerned at what is happening in the private sector and how that could once again become a drain on the public sector. However, there is a more fundamental argument at stake. I concede that the Lord Chancellor combines many functions. He is Speaker of the House of Lords, and I trust that the House will appreciate that none of my remarks are personal. That role of the Lord Chancellor is a political function. At the same time, he fulfils the role of a Member of the House of Lords in a judicial capacity as Lord Chancellor—as head of the judiciary and appointments. That is a different function. Tonight's salary order debate seems as good a time as any to ask whether there ought now to be a divorce between the Lord Chancellor's traditional and legal functions.

Mr. Stuart Randall: We are discussing a proposed salary increase of between 16 per cent. and 17 per cent. for the Lord Chancellor—

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. Is this an intervention?

Mr. Randall: Yes, Mr. Deputy Speaker. I am asking my hon. Friend, who is a very dear friend of mine, how he squares increases of that magnitude, which he seems implicitly to support in some cases, with the 3 per cent. or 4 per cent. that the Lord Chancellor constantly asks people in industry to accept.

Mr. Bermingham: That is a very interesting question if I understood it aright. Putting it simply, the increase sought by the Lord Chancellor this year is 3 per cent. Last year it was 16 per cent. I am arguing that the 3 per cent. should be 0 per cent. because there comes a time when one has to consider whether the salary suggested matches the job being done. I can advance this only in respect of the Lord Chancellor today, but I have the same reservations about all the other senior pay rises.
There comes a time when we have to consider how people are paid in this country. That is why I put this to the Leader of the House in an intervention earlier. It is all very well to use percentage points, but 10 per cent. of £100 is £10 whereas 10 per cent. of £10,000 is £1,000. There is a different way of looking at the whole subject of senior pay rises. I concede at once that there must be a basic figure, and a fairly substantial one, but once one goes above that if one continues to use percentage figures one increases the gap between the highest and the lowest paid in real terms to an extent that is both unacceptable and unfair.
I put it to the Leader of the House again that last year was a warning shot across the bows. The tragedy is that a second shot has not been fired this year. The House decided last year that it would not agree to very senior salaries ultimately reaching almost obscene levels of £80,000 or thereabouts. Perhaps this year some of us will reiterate the principle that we struck last year. We do not believe that there has to be an automatic increase at the top every year. There comes a time when we have to accept that the ceiling has been reached and that the money can be better spent elsewhere.
At a time when many functions in the legal world—law centres, for example — are in dire straits and in danger of closure, it seems wrong to increase the Lord Chancellor's salary still further into the alpine heights of unreality from the point of view of people who live and work in the real, everyday world where £20, £40 or £50 is a real and meaningful sum.
I hope that some hon. Gentlemen will ultimately agree with me tonight and oppose the Lord Chancellor's salary increase. I say that with no disrespect for the present incumbent, but merely with great critisicm of the principle on which the salary scale is based.

Mr. Jeremy Corbyn: I hope that the House will reject the Lord Chancellor's salary increase. This is an occasion when it would be valuable to the health of democracy if the House were televised, because British people living in enormous poverty would be able to see a group of Members of Parliament voting one person a salary of nearly £80,000 a year. I cannot imagine how


anyone can be worth that salary. The gentleman in question is a pensioner to boot, but I do not know whether he also receives an old-age pension.
At the other end of the public sector salary scale, Ministers lecure health workers that they are causing irreparable damage to the Health Service by the size of their pay claims, local government workers that they are causing cuts in local government services by demanding the princely sum of two thirds of average industrial earnings, and young workers that they can live on £25 a week.
The principle should be that if a person is being paid such a high salary, he certainly does not need any increase whatever. It is disgraceful that the House should be prepared even to consider giving him an increase. It is an example of double standards of the first order that the Government should be prepared to lecture the majority of people on the need to tighten their belts and to make sacrifices for the good of the economy and the country, while at the same time they pay £80,000 a year to one Minister.

Mr. Michie: Would it not be more just if the Government gave every low-paid worker a £53,000 a year rise instead of giving a rise in this instance?

Mr. Corbyn: My hon. Friend is correct. In reality, while the Government talk about our rising living standards, they do not intend that the living standards of the majority of the population should improve. If they did, 4 million people would not be unemployed and pensioners would not face the prospect next month of the princely increase of 40p a week.

Mr. Deputy Speaker: Order. The hon. Gentleman must address himself to the merits of the increase for the Lord Chancellor.

Mr. Corbyn: It is difficult to address myself to the merits of the Lord Chancellor's increase, because I can see no merits in it. I can see only demerits. I was merely drawing an analogy between the Lord Chancellor, who will receive £80,000 a year—I do not believe that anyone earns that sum—and the many elderly people who are the same age as him and who have also worked hard for many years to the benefit of the community, but who will receive an increase of 40p a week in their pension. That is disgraceful.
It is a shame that the order is being debated at this late hour and that most of the country is unaware of it. When it becomes clear that the Government are more interested in giving £80,000 a year to this gentleman than in settling the ancillary staff's pay claim, or giving pensioners or young workers a decent rise, people will once more oppose the Government. We may not be victorious in tonight's debate, but it will contribute to the nails in the coffin of the Government, who have continually shown themselves to be concerned only with looking after their wealthy friends in the police, the armed forces and the judiciary, and with imposing the lowest possible living standards on pensioners, the unemployed and low-paid working people.

Mr. Nick Raynsford: I, too, hope that the House will reject the order on an important point of principle. Like many hon. Members, I am conscious of the

difficulties encountered in recent years by law centres, which try to serve the poorest in our society. My constituency is not the only one where a law centre has been threatened with closure during the past 12 months. Indeed, the law centre in my constituency has only just survived with assistance from the local authority. Many law centres in other parts of Britain have had to close or lay off staff or run their operations under the threat of closure because of a lack of adequate funding, which can be traced back to the Government's failure to ensure a proper base for the funding of this important legal service for poor people.
That principle should guide the House to say that, because of the Government's failure to ensure that such services are made available to the poor, the Lord Chancellor's salary should not be increased this year. That would be a mark of the House's concern about that failure. I hope that the order will be rejected.

Mr. Dave Nellist: I rise alongside my comrades and colleagues to oppose the order. It is an obscenity, at 10.50 pm, to be discussing an increase in the salary of one of the highest-paid public servants in Britain when, in recent weeks in the same Chamber, I and my hon. Friends have tried to defend the rights of 500,000 young workers, each of whose annual earnings are the same as or less than the increase in the Lord Chancellor's salary. There is no merit—the Leader of the House did not answer my question on this—in one individual receiving an increase of £2,400 a year when 500,000 young workers, who receive salaries of only £2,400 or less a year, are told that they are pricing themselves out of jobs.

Mr. Corbyn: Is my hon. Friend aware that the amount that the Lord Chancellor is due to be paid in one week is more than a YTS worker receives in an entire year? Could that, by any stretch of the imagination, be fair?

Mr. Nellist: I had intended to make that point later, but I shall refer to it briefly now.
If the report of the Top Salaries Review Body and this order are about parity, providing people with the necessary incentive and getting people of the right calibre into jobs, those on the youth training scheme, whose allowance in April 1978 was £19·50 a week, should be receiving £44·06 a week if their salaries had been increased by the average increase in wages. If the House holds dear the principle of democracy and even-handedness, it should say that what is sauce for the goose is sauce for the gander. Tonight we are told that it is worth while increasing the Lord Chancellor's salary in line with inflation, but not the salaries of YTS workers.
I agree with the point made by my hon. Friend the Member for Fulham (Mr. Raynsford) about law centres. After all, the Lord Chancellor is the titular head of the legal system. Only a week ago, I received a letter from the citizens advice bureau in Coventry, which works with the Coventry legal and income rights service, saying that one old couple living on the Stoke Aldemar estate in Coventry, South-East were discovered to have been underpaid £33·40 a week by the DHSS. Through the work of the citizens advice bureau, they received back payment of £1,500. If the energy evident among Tory Members tonight, when we are discussing an increase of £2,400 in the salary of one


individual, was demonstrated more regularly in hunting out the thousands, if not hundreds of thousands, of pensioners and others who are underpaid by about £1,000 million, the stature and reputation of the House might be enhanced.

Mr. Corbyn: Is my hon. Friend aware that the DHSS has cut the number of inspectors who chase after companies which have gone bankrupt, leaving workers—

Mr. Deputy Speaker: Order. I have great difficulty in relating what the hon. Gentleman is saying to the subject before the House.

Mr. Corbyn: I was asking my hon. Friend whether the head of the legal service should be concerned about such companies not paying workers' national insurance contributions, and whether it should be the job of the DHSS to follow up these cases.

Mr. Nellist: I can find many uses for £80,000 a year—for example, employing six or seven more wages inspectors to chase up the 9,000 companies in the wages council sector which were found to be not paying proper wages, but of which only two were prosecuted. We might open the whole debate and discuss the implications of the legal system. On one side of the scales that hang above the Old Bailey we could put the 11,000 miners who were arrested during the miners' strike and in the other the only two employers out of 9,000 who were prosecuted for paying their workers illegal wages. If Lord Hailsham is worth £80,000 a year, he should at least be doing something to prevent such things from happening. Those should be the priorities of the Government's chief public servant. The £2,400 for an increase in the salary of the Lord Chancellor could have gone to help those on YTS and others who are on a low wage because of the Government's policies. There are 8,000 registered millionaires in Britain. It will not be long before Lord Hailsham is one of them if his salary is raised by this amount every year.
Under this Government, 1 million people earn more than £20,000 a year. The Government's tax cuts have given somebody on £100 a week a £1 decrease in his net tax bill over the past seven years to set aside the increase in indirect taxes. Those on £1,000 a week, which is less than the Lord Chancellor will be getting after tonight's order, have received a £330 net decrease in their tax bill. That shows the Government's priorities.
I do not normally quote from the Official Report of some time ago, but I shall do so tonight. I have returned from a meeting being held between the 7 o'clock and 10 o'clock votes. It is a somewhat historic quote, but I think that hon. Members will see its relevance to today.
It is interesting, because it would appear that the capitalist classes to-day are having a larger profit out of the slump than they did out of the boom. And while, at one end of the scale you have wage cuts down to the very bone, until millions of our people in full work are forced down to practical destitution and to a standard of living considerably below the subsistence level, you have, on the other hand, these fabulous dividends and you have, as everyone knows who goes about the West End, ostentation, luxury, extravagance, and waste of every description, which is being paid for by the blood and sweat of the workers. It is said that the country cannot afford a living wage for all its workers. It can afford a very large number of people, rich and super-rich people, who contribute absolutely nothing by their labour to the community. [Official Report, 7 March 1923; Vol. 161, c. 639.]

Those words come from the maiden speech of Dr. Alfred Salter, the Labour Member of Parliament for West Bermondsey. There is foretelling in those words. Those words, uttered 63 years ago, apply precisely to the idea that the Lord Chancellor's salary ought to be increased by £2,400 when 8·5 million workers in this country do not even receive a living wage.

Mr. Alex Carlile: I do not think that I can entertain the House by drawing a connection, as did the hon. Member for Coventry, South-East (Mr. Nellist), between the Lord Chancellor's salary and his activities in the miners' strike, of which I was hitherto unaware. However, I wish to put before the House what I perceive to be the views of many in the legal profession —and I am one — on this substantial increase in the Lord Chancellor's salary.
It is not that the Lord Chancellor does not deserve to have a substantial salary, because, as head of the judiciary, of course he does. It is not that one opposes the concept of the Top Salaries Review Body, with its independent assessment of what is the correct professional salary for somebody holding the august post of Lord Chancellor. As you will be aware, Mr. Deputy Speaker, it is a fact that there are many underpaid, experienced lawyers in this country, particularly some members of the Bar carrying out criminal legal aid work, who are pleading with the Lord Chancellor to introduce into their fee assessments a similar element of independence as he himself has in his own salary.
However, I do not wish to indulge in special pleading for them. Rather, I wish to look for a moment at the position of the Lord Chancellor in relation to other legal institutions. If one regards the legal system of this country as a pyramid, it is the Lord Chancellor who is at the top of that pyramid. If the stature of the Lord Chancellor in terms of salary increases, it must increase only in proportion to the pyramid beneath.
Let us look for a moment at what has been happening to some of the other parts of the pyramid that is the edifice of our legal system. The Government quite rightly introduced the independent Crown prosecution service. When we were discussing in Committee the Prosecution of Offences Bill we were told by the Attorney-General that the Crown prosecution service would attract recruits of a sufficient standard of excellence, so that some of the best young lawyers in this country would join it. This would mean that prosecutions, however difficult, would be presented competently and without having to rely upon thinly spread resources.
The fact is, as we have discussed in the past in the House, that the Crown prosecution service salary structure is inadequate and that it has not been possible to recruit a sufficient number of people—although some have been recruited—of the right calibre. It is an insult to the Crown prosecution service that such an enormous and disproportionate increase should be given to the Lord Chancellor when it is not being given the appropriate basis upon which to staff its service.
We have seen cuts in legal aid which reduce the number of people who are eligible for legal aid when they have been injured at work or in road accidents, or when they face divorce proceedings or other litigation. These are cuts in both money and real terms. They, too, make this salary increase for the Lord Chancellor seem to be wholly


disproportionate. We have seen law centres being decimated by this Government's policies. Therefore, while the Lord Chancellor's salary is being increased, some centres are having to close, while even the luckier ones are having to cut their services very substantially.
In rooms downstairs I have tonight seen representatives of the National Association of Citizens Advice Bureaux, who have made representations to hon. Members of all parties about the inadequacy of the funding of that part of the voluntary sector that deals with legal services. Yet, disproportionately, we see the Lord Chancellor's salary being increased in this way.
It is not the principle of the increase in the Lord Chancellor's salary which is so objectionable. Rather it is the singling out of the Lord Chancellor's salary from the Government's treatment of all the other legal services which I have mentioned which is greatly offensive to the legal profession, to those working voluntarily in the legal sector, and to right hon. and hon. Members on both sides of the House.

Mr. Simon Hughes: I have not been prompted to speak by the fact that the hon. Member for Coventry, South-East (Mr. Nellist) quoted one of my predecessors who was Member of Parliament for Bermondsey in the 1920s and for whom I have more than a sneaking regard, although he was not a Member of the Liberal party — at least, he was not ultimately, although he started off in the Liberal party.
This is the only debate that we can have on the salary of a member of the Government and that is sad. I do not approve this year, as I did not approve last year, of the Lord Chancellor, who is already substantially paid, being given more money. I oppose it, not just on a point of principle, given the gross inequities of pay in Britain, but also in regard to his carrying out of responsibilities as head of the judiciary.
The Lord Chancellor has been justifiably criticised for responding totally inadequately, through the inadequate funding of the legal aid system, to the needs of people who have insufficient private finance to pursue their own legal remedies. He has been criticised, quite rightly, for not responding to the fact that many law centres will now not be funded and many people at the bottom end of the economic scale will not have the wherewithal to challenge, particularly in areas of welfare law, matters of fundamental importance to them, be they on housing or in other areas.
There is also one area that I am not aware has been mentioned. The Lord Chancellor has not responded, as head of the judiciary, to the massive need that there is in Britain for the funding of people in other forms of legal forums — in tribunals, and, in particular, at inquests. Until the Lord Chancellor does his job properly and makes sure that people in all walks of life have equal access to the legal remedies that are designed to be available, we should not give him anything that compliments him on his tenure in his job as head of the judiciary.
A family of constituents of mine are trying to obtain representation at an inquest looking into the death of their son while in custody in Devon. They have not had 1p of public funding to help them in an inquest of several weeks' length. It is unacceptable that this so-called civilized

society cannot help people to obtain legal remedies when they do not have the means. The Lord Chancellor should have exercised some sort of social responsibility together with his judicial one. He has failed abysmally.

Mr. Biffen: This has been a most good-natured and wide-ranging debate and it would be a courtesy to the House if I just uttered two or three sentences by way of conclusion.
Those of us with longish memories and who can recollect all the nocturnal orders that were issued under the Prices and Incomes Act 1966 will realise that there was a curious yearning for the entertainment that those episodes conferred in the way in which the debate this evening fairly quickly got into the wider track of wages councils, law centres, the miners' dispute, millionaires and then a charming reference to Dr. Salter, who, like the hon. Member for Southwark and Bermondsey (Mr. Hughes), I know only by repute. He was a formidable personality and a great evangelist for temperance, a man of great reputation and almost a legend in Bermondsey.
But I want to be wholly pedantic and narrow and speak solely to the order on which the House is invited to vote, but in so doing to draw attention to three points. If the House is satisfied on those three points, it must have no doubt about supporting the motion. But if the House and the right hon. Member for Bethnal Green and Stepney (Mr. Shore) are not so satisfied, they will have to vote otherwise.
I turn to the sum now proposed for the Lord Chief Justice, who is the regulator in this matter since his pay ultimately gives rise to what is paid to the Lord Chancellor. Do we think that a touch above £77,000 a year is a reasonable sum, given that the Judiciary can ultimately only he recruited from the Bar and that we must take account of the best earnings obtained by the most successful at the Bar? No one has seriously questioned that sum.
But the hon. Member for Southwark and Bermondsey will reject the motion on the basis that the figure is too high. I understand that in the populist world of Bermondsey that may gather a few votes—

Mr. Simon Hughes: Not just in Bermondsey either.

Mr. Biffen: But in the real world we tread a dangerous path if membership of the Bar makes membership of the Judiciary relatively unattractive.
We must also judge whether the £2,000 or so that is a token sum to distinguish—

Mr. Nellist: Token?

Mr. Biffen: —yes, token. It distinguishes the role of the Lord Chancellor from that of others in the profession because he is its leader. I believe that that leadership is properly reflected in that sum, and that it was judged to be so by the Top Salaries Review Body. The House has been wise to abide by that recommendation.
The hon. Member for St. Helens, South (Mr. Bermingham) argued that there should somehow be a nominal figure at the top end of the judicial profession in order consciously to compress differentials within that element of the public sector. My hon. Friend the Member for Leicestershire, North-West (Mr. Ashby) made the point well. That argument starts with the judiciary, is extended to the Civil Service, and then spreads to the


nationalised industries. If the hon. Gentleman supposes that the public sector can he insulated from the differential pattern of the private sector, he is living in the illusionary Fabian world shared by the alliance and the Labour party.
We should have none of that, and should give the order our whole-hearted support.

Mr. Deputy Speaker: The Question is, That the draft—

Mr. Bermingham: On a point of order, Mr. Deputy Speaker—

Mr. Deputy Speaker: —Lord Chancellor's Salary Order 1986, which was laid before this House on 3 June, he approved. As many as are of that opinion —

Mr. Bermingham: On a point of order, Mr. Deputy Speaker. I beg to move, That the Question be not put, and that the previous Question be put.

Mr. Deputy Speaker: I understand that there is not a previous Question at this stage. I have put the Question—

Mr. Bermingham: Further to that point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: Order. I have put the Question on the order.
The House proceeded to a Division—

Mr. Bermingham: (seated and covered): Further to that point of order, Mr. Deputy Speaker. I refer you to page 388 of "Erskine May", where you will see that the matter of the previous Question being put is a procedural matter. It is a perfectly proper Question. I am entitled to put it. It was last put in 1943, and it should take priority over the Question on the order. You have denied me my parliamentary right to put that Question, and I ask that the matter be now rectified.

Mr. Deputy Speaker: I have the appropriate page. The hon. Gentleman is quite right, but he talked about the previous Question, when he should have moved, That the Question be not now put. I did not hear those words, and the hon. Gentleman did not put the Question in that way.

Mr. Bermingham: Further to the point of order, Mr. Deputy Speaker. You cannot put the formal Question unless you are permitted to put it. You attempted to put the formal Question, even though I was on my feet attempting to raise a point of order.

Mr. Deputy Speaker: I put the Question before I saw that the hon. Gentleman was on his feet.

The House having divided: Ayes 120, Noes 29.

Division No. 232]
[11.15 pm


AYES


Alexander, Richard
Bowden, Gerald (Dulwich)


Ancram, Michael
Bright, Graham


Arnold, Tom
Brinton, Tim


Ashby, David
Brooke, Hon Peter


Baker, Nicholas (Dorset N)
Brown, M. (Brigg &amp; Cl'thpes)


Batiste, Spencer
Bruinvels, Peter


Bellingham, Henry
Butcher, John


Biffen, Rt Hon John
Carlisle, Rt Hon M. (W'ton S)


Blackburn, John
Cash, William


Boscawen, Hon Robert
Chope, Christopher


Bottomley, Mrs Virginia
Clark, Dr Michael (Rochford)





Clark, Sir W. (Croydon S)
Murphy, Christopher


Cockeram, Eric
Newton, Tony


Coombs, Simon
Nicholls, Patrick


Cope, John
Norris, Steven


Currie, Mrs Edwina
Onslow, Cranley


Dorrell, Stephen
Osborn, Sir John


Douglas-Hamilton, Lord J.
Page, Sir John (Harrow W)


Dover, Den
Page, Richard (Herts SW)


Durant, Tony
Percival, Rt Hon Sir Ian


Evennett, David
Portillo, Michael


Forman, Nigel
Powell, William (Corby)


Forsyth, Michael (Stirling)
Powley, John


Forth, Eric
Raffan, Keith


Fox, Sir Marcus
Rathbone, Tim


Garel-Jones, Tristan
Rhodes James, Robert


Goodhart, Sir Philip
Rhys Williams, Sir Brandon


Gower, Sir Raymond
Rowe, Andrew


Griffiths, Sir Eldon
Sackville, Hon Thomas


Gummer, Rt Hon John S
Sainsbury, Hon Timothy


Hamilton, Hon A. (Epsom)
Shaw, Giles (Pudsey)


Hanley, Jeremy
Soames, Hon Nicholas


Heddle, John
Spencer, Derek


Hind, Kenneth
Spicer, Jim (Dorset W)


Howarth, Gerald (Cannock)
Stanbrook, Ivor


Jackson, Robert
Stern, Michael


Key, Robert
Stewart, Allan (Eastwood)


Knight, Dame Jill (Edgbaston)
Taylor, Teddy (S'end E)


Knowles, Michael
Tebbit, Rt Hon Norman


Lawrence, Ivan
Thompson, Donald (Calder V)


Lennox-Boyd, Hon Mark
Thompson, Patrick (N'ich N)


Lester, Jim
Thorne, Neil (llford S)


Lilley, Peter
Thurnham, Peter


Lloyd. Sir Ian (Havant)
Townend, John (Bridlington)


Lloyd, Peter (Fareham)
Twinn, Dr Ian


Lord, Michael
Waddington, David


Luce, Rt Hon Richard
Waller, Gary


MacGregor, Rt Hon John
Wardle, C. (Bexhill)


Major, John
Warren, Kenneth


Malins, Humfrey
Watson, John


Maples, John
Wells, Bowen (Hertford)


Maude, Hon Francis
Wheeler, John


Maxwell-Hyslop, Robin
Whitney, Raymond


Mayhew, Sir Patrick
Wilkinson, John


Mellor, David
Winterton, Mrs Ann


Meyer, Sir Anthony
Winterton, Nicholas


Miller, Hal (B'grove)
Wood, Timothy


Mills, Iain (Meriden)
Yeo, Tim


Mitchell, David (Hants NW)



Moate, Roger
Tellers for the Ayes:


Morris, M. (N'hampton S)
Mr. Michael Neubert and


Moynihan, Hon C.
Mr. Gerald Malone.


NOES


Ashdown, Paddy
Nellist, David


Beaumont-Dark, Anthony
Parry, Robert


Bermingham, Gerald
Patchett, Terry


Bruce, Malcolm
Penhaligon, David


Buchan, Norman
Pike, Peter


Carlile, Alexander (Montg'y)
Raynsford, Nick


Clay, Robert
Short, Ms Clare (Ladywood)


Clwyd, Mrs Ann
Skinner, Dennis


Cohen, Harry
Smith, Cyril (Rochdale)


Dixon, Donald
Wallace, James


Duffy, A. E. P.
Winnick, David


Field, Frank (Birkenhead)
Young, David (Bolton SE)


Fisher, Mark



Hughes, Simon (Southwark)
Tellers for the Noes:


Lewis, Terence (Worsley)
Mr. Tony Banks and


Loyden, Edward
Mr. Jeremy Corbyn.


Michie, William

Question accordingly agreed to.

Resolved,
That the draft Lord Chancellor's Salary Order 1986, which was laid before this House on 3rd June, be approved.

Representation of the People

The Parliamentary Under-Secretary of State for the Home Department (Mr. David Mellor): I beg to move,
That the draft Representation of the People Regulations 1986, which was laid before this House on 13th May, be approved.

Mr. Deputy Speaker (Mr. Ernest Armstrong): With this it will be convenient to take motion No. 5:
That the draft Representation of the People (Scotland) Regulations 1986, which were laid before this House on 15th May, be approved.

Mr. Mellor: The motions relate to England, Wales and Scotland only, and I can be fairly brief.
The regulations give effect to principles which were determined by the House in the exhaustive consideration that was given to the Representation of the People Act 1985. They are significant because they carry into effect the extension of the franchise that was agreed by the House and make provisions for declarations to be made by British citizens overseas. The consequent provisions will, for the first time, enable many of our fellow citizens who work abroad serving the national interest to vote in elections for a period of five years in the constituency in which they were last registered.
The regulations give effect to a further fundamental change in our arrangements, which is to permit absent voting for those who are away on holiday. As a result, all the absent voting arrangements are changed—we hope materially for the better — in the detailed regulations that are set out. However, I apprehend that if I were to go into great detail about them, I would not necessarily carry the House with me. I hope that it may be taken on trust that detailed and, I believe, simple and straightforward arrangements are made in the regulations.
Part III of the regulations, which deals with the registration of electors, contains a number of useful changes relating to the identification of names included for the first time in the draft register, which will assist in the necessary scrutiny of the register by other electors and the political parties.
Part V of the regulations deals with the issue and receipt of postal ballot papers to be combined at combined elections which, taken together with part VI, which contains a completely new set of provisions to govern the conduct of elections where polls are combined, gets away from the difficulties which we found on a number of occasions about combining certain parliamentary elections with Euro-elections and certain parliamentary elections with local elections.
The regulations were properly and fully canvassed with the party organisations before they were laid before the House. I believe that they reflect the principles which we have enshrined in legislation. Many of them are significant and, I believe, worthwhile changes in our election procedure and will enhance the quality of our democracy. On that basis, I commend the regulations to the House.

Mr. Robin Corbett: I make it clear, on behalf of my Labour colleagues, that we welcome the regulations. As the Parliamentary Under-Secretary of State for the Home Department has said, they put into the law those matters which have been the subject of debate and agreement between the parties. The first quick point

I shall make will not be new to the hon. Gentleman. I still hope that in amendments which we propose to make, one of these days, to the main Representation of the People Act, we shall include proposals to limit expenditure by national political parties in their favour at general elections.
It seems to be a gigantic hole in the regulations that we quite properly control expenditure at the local level regarding expenditure limits for each elector, yet, nationally, parties can spend whatever money they can lay their hands on urging electors to support a party. I hope and expect that most hon. Members will agree when I say that that smacks of Britain moving to an American-type presidential election system, where in my view, a candidate's election depends very much on the size of his pocket or purse. In that sense, a candidate tries to buy his election. None of us want to see that happen in this country.
It seems to me that it is a hole in our regulations where, in the conduct of elections, no limits are imposed on what can be spent to promote, nationally, the image of one party or another. I say that in respect of the hon. Gentleman's party, my party and every party.
Regulation 28(3) deals with information from householders. It raises the fine from £100 to £400 for a householder who does not do what he is obliged to do under the Act in giving information of people who live in the household and who should be on the register of electors.
I have no objection in principle to increasing the fine. I do not want to make heavy weather of the Government's proposals for a poll tax or, as they call it, a community tax. I understand that the electoral register will not be used for the register of ratepayers, but we have been told that the register of ratepayers will be based upon it. We do not want—and we hope that the Government agree—people to feel that, if they do as they are supposed to do under the Representation of the People Act 1983 and properly register their names on the register of electors, they will face the jeopardy of the poll tax.
It would be wrong to have a knock-on effect whereby people are inhibited from properly registering to exercise their vote and are afraid that, in doing so, they will be lumbered with the poll tax. I should like the Under-Secretary of State to assure the House that the Government do not intend to implement the provisions of regulation 29(3) and to introduce a fining system to penalise those who do not register. I do not necessarily expect the hon. Gentleman to answer tonight because, to be fair, that is not within his departmental responsibilities.
We have to keep the two aspects separate. We must preserve the electoral register. All hon. Members and members of political parties have a resposibility, if not a duty, to encourage people who are eligible to have their names on the electoral register to be satisfied that, when they have filled in the appropriate form, they will be entitled to a vote at local elections, parliamentary elections and elections for the European Assembly and that nothing else will happen to them.

Mr. Tim Rathbone: I welcome the proposals overall, but I should like to point out some drawbacks. Many Conservative and Labour Members were discontented with the limited granting of overseas votes. My hon. Friend the Member for Corby (Mr. Powell) and other


Conservative Members were vociferous in claiming in perpetuity the right of British people living abroad to vote for the Government of their country, which remains their country wherever they live and for however long they live there. However, this measure is a step in the right direction, as is the granting of holiday votes.

Mr. William Powell: Is my hon. Friend prepared to go so far as to say that the Conservative party's policy should be to extend the franchise to overseas voters beyond the five-year period and that we should campaign for that in the future?

Mr. Rathbone: I could not agree more with my hon. Friend who was another supporter of that sentiment during our previous debate on this matter. If my memory serves me correctly, the Government said that they would consider how the policy worked — however it was measured — and, if it worked so properly, they would extend the period. That was certainly the innuendo, if not the commitment. I therefore endorse my hon. Friend's comments.
It is fascinating that, in the closely packed 88 pages of the regulations, great emphasis is placed on the precision with which we should conduct our elections for example, the way in which declarations of identity should be made. Flick open any page and find attached detailed advice and direction as to how elections should be conducted. My hon. Friend the Minister mentioned that the purpose of the Representation of the People Regulations 1986 is to enhance the quality of our democracy. The tragedy is that, precise though the regulations are, all they do is ensconce even further the completely arbitrary nature of the electoral format used in this country under which, more times rather than less, a Government are returned who are non-representative of the majority of people. It is a marvellous Anglicism, it maybe British—let me embrace all of those from north of the border and from over the seas, especially the Irish sea — that we spend all our time here debating and adopting motions which will make what we have work perfectly with great precision, without any credence being given to whether what we have working is what ought to be working.

Mr. William Cash: rose—

Mr. Rathbone: I plead with my hon. Friend the Minister, as a meteor of good sense in Government, as he has proven himself to be on so many other subjects, however embarrassing it might be to embrace this meteor, to carry into Government circles the argument for the adoption of more proportionate systems of election in this country than we have had over the years.

Mr. Cash: rose—

Mr. Rathbone: I hope that my hon. Friend will forgive me if I do not give way. I want to make my speech short because I want to carry the House with me.
I hope that my hon. Friend the Minister will take my message to heart as representative of a large body of opinion on Conservative Benches on the benefits of electoral reform, which is not embraced only—

Mr. Deputy Speaker: Order. The hon. Gentleman is going a little wide of the order.

Mr. Rathbone: I agree, Mr. Deputy Speaker. I am going as wide as can be because I am denigrating the order for its value in its essence as opposed to in its application.

Mr. Alex Carlile: It did not surprise me to witness the cosy embrace between the Parliamentary Under-Secretary and the hon. Member for Birmingham, Erdington (Mr. Corbett). I agree with the hon. Member for Lewes (Mr. Rathbone) about the electoral system. Regulation 100 contains the clear proof and manifestation of the snug cartel which exists between the Labour and Conservative parties as they attempt to outwit the electorate with an outdated and outrageous electoral system—and they know it. [Interruption] It was very encouraging to hear an expression of opinion so clear and strong in its condemnation of that form which we see in regulation 100, which perpetuates the present system, coming from behind the Parliamentary Under-Secretary.
Part II of these regulations deals with overseas voters' declarations. Again, I find myself in total agreement with the hon. Member for Lewes. It is extraordinary that people who live and work within the European Community, even people who live and work for British companies or organisations within the EEC and who are putting forward British interests for more than five years, are to be deprived of their right to vote. The United Kingdom is a signatory to the United Nations covenant—

Mr. Deputy Speaker: Order. The hon. and learned Gentleman is going very wide of the order. I remind him that we are discussing the administration of a policy which has already been decided by the House.

Mr. Carlile: I am directly referring my comments to regulation 23, which deals with the content of an overseas elector's declaration. In my view, it is highly regrettable that regulation 23 and that section of part II of the regulations does not contain provisions which enshrine what ought to be the rights of British citizens under international law to be able to vote in British elections. The regulations deprive bona fide British citizens of their right to vote, largely because of criticism that has been made of a small number of criminals who have outwitted the British police. It is a great shame that honest citizens should be deprived of their rights as voters because of that.
Part III of the regulations deals with registration and electors' lists. There is no provision in the regulations, particularly regulations 31 to 36 inclusive, to ensure that people who have many residences vote only in the place where their main place of residence is. In my constituency in rural Wales, and indeed in many other constituencies that are holiday areas, and also in London, where there are many second homes—not least those in which some of us live, at least during the small hours — there is the opportunity for tactical voting not only in the constituency but between constituencies. It is highly regrettable that the regulations do not contain something that brings that to an end.
I should like to deal next with some rather less general and more technical matters, which I hope will not necessitate your scanning the regulations further, Mr. Deputy Speaker, to see whether I am still in order. I should like to ask the Minister whether he is satisfied with the arrangements contained in the regulations for the filling in by voters of forms for registration as voters. At present the forms are distributed in the summer, in August, and have to be in by October. Some of those forms are returned quickly in August, but others are returned rather late. Because of the two-month gap that can arise, or at least


the two-month spread for return of registration forms, particularly in areas where the population is rather mobile, such as many areas of London, the register is bound to be inaccurate by the time it comes into existence. I ask the Minister to consider whether it might be better to have a national registration day or week, which would ensure that there was not that span of time during which registration forms could be returned, but a shorter time, so that the register was much more accurate.
Secondly, I should like to ask the Minister about the practice for combined polls. I understand that in some parts of the country, when there have been combined polls—more than one election on the same day—there have been difficulties in the way in which ballot papers have been handed out. In some places, where there were two elections, the polling clerk has simply proffered to the elector two forms, one for each election, to take into the polling booth. In other places, the polling clerk has asked the elector whether he wishes to have a form, a polling paper, for one election or the other, or both. I hope that in the future arrangements will be made— pursuant to the regulations — to ensure that there is a standard practice. That may sound, and perhaps is, a somewhat pedantic point, but I can tell the Minister that it has caused real difficulty. I understand that there is some litigation in being at present because of the lack of standard practice for multiple polls.
The final question that I should like to put to the Minister, who I know will, as ever, be extremely helpful in his answers, is about the practice of distributing marked registers. I understand—although I have never done this myself—that it is possible to obtain a marked register after an election has taken place. That is a register that is marked to show which voters have voted. That may be a questionable practice. One may ask whether marked registers should be available after elections. I am concerned as to whether it is proper that candidates should be able to find out who has voted. Apparently it is possible to obtain these registers at the moment. However, there are widely varying practices as to the time within which marked registers are made available to candidates after the election.
That matter is considered to be important by those who are involved in the management of elections. Is the Minister satisfied with the arrangements for handing such registers to candidates after elections have taken place? If the registers are to continue to be available, will the Minister ensure that there is a standard period within which the registers, if required, must be made available to candidates?

Mr. Roger Moate: I warmly welcome these regulations. They constitute a major and significant extension of the franchise and in many ways they are historic. I share the disappointment of my hon. Friends who have regretted the five-year limitation on overseas voters, and I believe that many people abroad have a deep and fundamental right to vote in general elections in this country. I hope that at some stage we shall see that five-year period extended further or, preferably, extended without limit. That is a fundamental right of British people who live abroad and who still have a fundamental allegiance to their country.
I especially welcome the extension to the right of absent voting to people on holiday. I have always thought that it was a gross injustice for individuals to lose their vote because they had the audacity to plan a holiday without consulting the Prime Minister of the day or the date of the general election. These are welcome extensions and I have no doubt that the House will accept the regulations.
We should all be disappointed at the fairly low poll among service voters. I hope that the Minister will give some assurance that the new arrangements in the regulations will facilitate service voting and encourage a higher percentage poll among such voters.
The Representation of the People Act 1985 provides for candidates to dispatch their election addresses post free and unaddressed. That is an important extension. All hon. Members will be familiar with the great envelope writing exercise of hundreds of thousands of party workers. The Act states that the Post Office will be obliged to distribute unaddressed election addresses to every voter.
Schedule 4 to the Representation of the People Act 1985, under the heading
candidate's right to send election address post free
states:
One unaddressed postal communication, containing matter relating to the election only and not exceeding 60 grammes in weight, to each place in the constituency which, in accordance with those regulations, constitutes a delivery point for the purposes of this subsection".
The object of that is clear. On balance it will be welcomed as it will mean that workers' energies can be directed into other more fruitful activities. It would be disappointing if the object of that provision was thwarted by a narrow definition of a delivery point. I have examined the regulations carefully for the answer to that, and I have raised the matter in correspondence with my hon. Friend the Minister because, if the Post Office stated that it was only prepared to deliver unaddressed communications to a central point, that would be unsatisfactory for the candidate as he would have to address every envelope to every elector.
Large blocks of flats, military barracks, old people's homes, and so on, usually have one central delivery point. If the Post Office insisted on delivering only to that point there would be no guarantee that the election addresses would be delivered to every elector. The object of the provision is clear, and I am sure that my hon. Friend the Minister wishes it to be used in general elections, but it would be most helpful if he would explain where in the regulations the obligation is laid upon the Post Office to deliver one unaddressed postal communication to each elector, or at least to each residential unit, which is the basis on which most people arrange such deliveries. It is a small point, but I suspect that, like many other small points in these massive regulations, it could have a considerable effect on the way in which the next general election and other elections will be organised.
In general, however, I hope that the whole House will give a warm welcome to this extension of the franchise.

Mr. John Home Robertson: I do not know why Conservative Back Benchers are so anxious to ensure that escaped train robbers and people living in overseas tax havens to avoid paying tax here nevertheless have the right to vote in our elections. I do not share that enthusiasm, but I support the general thrust of the regulations, which are clearly intended to make it easier for


people to vote if for reasons beyond their control they cannot get to their local polling booth. I understand that that is the purpose of the regulations, particularly with regard to holidaymakers, and it is obviously a good thing. I just hope that it will work that way.
I should like to deal briefly with the slight variations in the powers and discretions of electoral registration officers in England and Scotland. I have been a little worried about the situation in the Lothian region, part of which I represent and part of which is represented by the Parliamentary Under-Secretary of State for Scotland. In the past, obtaining a postal vote seems to have involved something of an obstacle course, even under the present regulations. People who registered as absent voters due to disability and had the appropriate forms signed by their doctors before one election assumed that their registration would continue in perpetuity but discovered just before the next election that they had to go through the whole rigmarole again because the registration officer had wiped the slate clean. That seems unfortunate.
Before the recent regional elections there was an equally curious situation when the electoral registration officer made it clear that he was rationing application forms for absent votes. Political parties had to obtain them in tens rather than in the hundreds required in some of the larger districts. Exercising one's right to vote should not involve an obstacle course, and I sincerely hope that the regulations will be administered in the spirit in which Parliament clearly wishes them to operate.
I have one final detailed point. Regulations 45 and 46 in respect of Scotland provide that the electoral register must be set out on the basis of parliamentary polling districts. Some of us have found, in our constituencies and in by-elections elsewhere, some very peculiar parliamentary polling districts. They seem to be based on ancient parish boundaries where drove roads over the hills once connected a remote farm to some outlying village. Such drove roads no longer exist and people can find they have mile long trips to get to a polling station. It is a pity it is so difficult to bring the boundaries of polling districts up to date to enable people to vote at the polling station most convenient to them.
But for those observations, I add my welcome to the regulations.

Mr. Gary Waller: I wish to address my brief remarks to regulation 66 which relates to section 7(1) of the Representation of the People Act 1985 which applies to absent voters.
We all agreed that it was right that those who were on holiday and unable to vote should be able to exercise their democratic right to vote in their absence. The difficulty was in determining what was a holiday, and in the end it was decided that anybody who had reasonable cause not to be able to go in person to the polling station should he able to claim an absent vote.
Regulation 66 requires an applicant to set out the reasons why his or her circumstances are such that he cannot reasonably be expected to vote in person. There is difficulty in determining what is reasonable. As far as I know, there is no guidance to registration officers on what could be considered reasonable. It may be argued that this will have to be developed in case law, but I cannot see many such cases coming to court and learned judges

determining what is and what is not reasonable. At a general election different registration officers may have different ideas about what is reasonable.
Someone may say that he wants to visit his grandmother who lives 50 miles away and will not be back in time to vote that day, for example, and may claim that he has a reasonable case for an absent vote. When canvassing, all hon. Members have come across people who say, don't think I'll bother." When pressed, they add, "Well, I shall be going to a football match as soon as I get home from work and I might have a drink or two after the match. I don't think I'll have time to vote when I get back." If I were an unscrupulous candidate I might say that that could be considered reasonable and that the voter should be able to claim an absent vote for that cause. It may be difficult for a registration officer to draw the line.
It would be possible to manipulate elections, if one were prepared to be unscrupulous and to work fairly hard, especially in elections where the turnout is low — for example, at some local government or parish council elections, which are equally important to the democratic process.
I hope that the operation of the regulations will be carefully monitored and that reasons given will be analysed to ensure that different registration officers apply similar reasoning for granting or withholding the absent vote. Granting the vote to people who are genuinely on holiday is certainly to be welcomed, but I fear that we may be drawing the lines so widely that the whole process of electoral law could come into doubt.

Mr. Peter Bruinvels: I welcome the regulations but regret the fact that the ballot is still not secret. Yet again, the polling officer will write down the number of each person who enters the polling station, and, when the person votes, it is, therefore, not a secret ballot. In Malta, ballot boxes have been opened and the boundary commissioners have changed constituencies and wards at the next elections. I should have much preferred a genuine, secret vote.
There is still no safeguard for the proper stamping of all ballot papers by the polling officer. In Leicester, at the general election, several ballot papers were ruled invalid because they were improperly stamped. I see no regulations governing that. Perhaps my hon. Friend the Minister will reassure the House that such problems will be avoided in the future.
Like some Opposition Members, I do not approve of overseas electors being able to vote after more than five years' absence from Britain. Unless people are working abroad indefinitely, their country is here and, after live years, they should decide whether they remain abroad and become disfranchised or return to the United Kingdom and vote as before.
On regulation 53, I urge my hon. Friend to remind all registration officers that it is in order for Members of Parliament to receive free copies of the electoral register. In my constituency, the registration officer is trying to charge me £16·50 for the 1986 register. Indeed, I received a reminder only last Thursday. I should be grateful if my registration officer were reminded of that point.
The part IV regulations regarding absent voters have been greatly welcomed. Under regulation 63, holidaymakers can now vote. That commitment was given before the original regulations were introduced. We raised the matter immediately after the 1983 general election.
Regulation 29 deals with form A — "Return by Occupier as to Residents." At each general election we see pictures in the newspapers of children aged about two holding their official polling cards. There are regular misunderstandings, with parents placing on the register children who should not be there. The form makes it clear. It states:
Please do not include … People under 16.
That should be emphasised much more strongly in the registration forms. Indeed, I urge my hon. Friend to make mandatory the checking of the register once it has been compiled. Each occupier of a house should check the register to see whether everyone mentioned on it is entitled to vote. The period for checking is 28 November to 16 December. Similarly, I hope that the ethnic communities can be reminded of their duty not to place people aged under 16 on the electoral roll. Regulation 29 does not make that clear enough.
Declarations of identity are liable to possible misinterpretation under regulation 79(a) and (b). The witness could be in dispute. Although I understand the operation of that regulation, I urge my hon. Friend to make it clear that it is a serious offence to encourage someone to vote who is not authorised to vote. This is a great problem in Northern Ireland with personation. I hope that the provision can be applied under the English regulations.
With regard to the return and declaration of election expenses under regulation 12, most hon. Members stick closely to the requirements for filling in forms L and M as soon as possible within the necessary period. However, I am suspicious that not everything is included.
The requirements on polling cards should make it clear that outside a polling station the purported marked-up ballot paper that is handed out to members of the public as they go in should not appear to be a genuine polling card. This should be properly looked into.
Combined polls come under regulation 100(2)(e)—
Modifications of parliamentary election rules"—
and control of them is imperative. We had a recent case of a by-election and a local election in Surrey on the same day. I note this regulation because there was great confusion as to how many votes people had. It was two for the local election and one for the by-election. In all these cases, we have to assume that people do not understand their legitimate rights of voting. We must be not patronising, but more forthcoming on the right to vote.
I urge my hon. Friend to look again at the serious matter of personation. Many constituencies have small majorities. We must warn people that personation is contrary to the law, just as it is to vote often, early and at least twice. It is a privilege to vote in any election, and we must also—

Mr. Alex Carlile: It is a right not a privilege.

Mr. Bruinvels: It is a right, but also a privilege. We are British, and this privilege is one of the few things left in this country for which we do not have to pay.
I urge a reminder that in parliamentary elections one cannot vote for two candidates. The regulations are fine in detail, but a full explanation of them is also required.

Mr. Mellor: With the leave of the House, Mr. Deputy Speaker. I have enjoyed the debate, and I am grateful to the House for the warm welcome that has been given to the regulations.
I thank the hon. Member for Birmingham, Erdington (Mr. Corbett) for speaking with typical courtesy and brevity. The limiting of expenditure is a major decision that I suspect that the House is a long way from making, but we noted his point. The Green Paper on local government finance makes it clear that the electoral register will be one of the sources of information available to local authorities when they compile the community charge register. The question of liabilities and sanctions relating to it is still under consideration, and I shall ensure that my right hon. and hon. Friends in the Department of the Environment are clear about the marker that the hon. Gentleman has put down.
I thank my hon. Friend the Member for Lewes (Mr. Rathbone) for the attractive way in which he made his speech, although I am afraid that for this particular meteor to plunge into the darkness of electoral reform would be a little unwise, particularly at this time of night. However, I note what he says. Again, this is a major issue of policy that lies outside the regulations, but we have all heard what he said and noted his sincerity.
My hon. Friend also made a point about the limited grant for overseas voting. Our position is clear. We wanted a longer period. Originally, we proposed seven years. In the legitimate interest of obtaining the agreement of the House, so that we would have an unopposed Third Reading for such a major change in electoral arrangements, the period was brought down to five years. I am speaking only for myself when I say that I hope that the House will take an early opportunity to return to this point. After we have demonstrated what a good idea this change is, with the successful carrying through of a large number of people working overseas who have voted in an election, I should want us to broaden the period that is allowed.
The hon. and learned Member for Montgomery (Mr. Carlile), who almost blotted his copybook in the last minutes of the debate, made six points in a thorough and interesting speech. The first three were policy points, and part of the ritual incantations that the Liberal spokesman—the hon. Gentleman has the honesty to agree with me — has to make on these occasions. What can I say except that we cannot agree with them? He made three detailed points to which I can respond. On registration, one could say that there is already a national registration day on 10 October, because everything relates to where people are on that date.
As to whether or not electoral registration officers send out the forms too early, that matter is within their discretion. However, I take the point, and during our discussions with the EROs I shall ensure that the hon. and learned Gentleman's point is made known to them.
The hon. and learned Gentleman also referred to combined polls and mentioned differences in practice. Our view is that without any form of interrogation a voter should be handed all the relevant ballot papers for the elections that are taking place that day. In the event of that


practice not being followed in some areas, perhaps the hon. and learned Gentleman will provide me with further and better particulars.
As for the marked register, the argument is that public inspection of the marked register is an important safeguard so that electors may satisfy themselves that the election is honest—that the individual who voted was the person who should have voted. That point was raised in the interesting contribution of my hon. Friend the Member for Leicester, East (Mr. Bruinvels). That is the basis for the inspection and it is provided for in schedule 1 to the 1983 Act. As to the period within which public inspection should be allowed, that lies within the discretion of the EROs. We should be reluctant more tightly to circumscribe their discretion, but we are prepared to consider complaints about the way in which individual EROS go about their business in the interests of proper administration.
My hon. Friend the Member for Faversham (Mr. Moate) referred to service voters, a point that concerns many hon. Members. The take-up of service votes is reasonably low. However, that matter is slightly outwith the regulations. Our view is that whether or not an elector chooses to exercise his franchise is a matter for him. There is no good reason in practice for the low take-up rate, and I do not believe that anything could easily be done to improve it. The arrangements for service voting are precisely the same in every material particular as for other voters.
My hon. Friend also raised an important point about the delivery of unaddressed election material through the post. We regard this as a useful service for some candidates, who may not have available dozens of elderly ladies to scribble addresses for them—a delightful sight in our committee rooms. The Post Office's criterion for a delivery point is that the place in question must be permanently and separately occupied and accessible to the general public and that it must have a separate letter box and a separate address. That should mean every point to which a postman, if a properly addressed letter came into his hands, would deliver. However, that would exclude buildings in multiple occupation where there is one main letter box. That is why it can never be quite so thorough if one has to rely on unaddressed material as it can be if the material is addressed to somebody. I should not expect the Post Office to seek to wriggle out of an obligation by suggesting that, as a normal part of a postman's beat, unaddressed material was not, in fact, an address for the purpose of these arrangements. I believe that the regulations have been appropriately drawn.
It may just be the mellowness that descends upon me at this time of night, but the hon. Member for East Lothian (Mr. Home Robertson) made what was almost a sensible speech. I have waited for seven years in this House to hear such a speech, and I do not know what has come over him. The rationing of the supply of applications for postal votes is a matter for discretion. More can be and, indeed, are supplied, if requested. As for the definition of polling district boundaries, that is a matter for the returning officer, although most of them consult and will accept—as happened in my constituency—representations made by the parties, if it appears that the polling district is not conveniently drawn for the electors. In my constituency, electors had to cross a busy arterial road and

it was determined that they should no longer have to do so. I hope that in most areas that sort of give and take goes on and sensible results come out of it.
I want to assure my hon. Friend the Member for Keighley (Mr. Waller) that we keep in close touch with representatives of the EROs and will be told if any particular difficulties arise. The discretion is fairly tightly drawn in the sense that the main Act provides that an absent vote is available only if a person
cannot reasonably be expected to vote in person".
That is certainly not synonomous with "cannot be bothered to vote". We expect that the EROs will exercise their discretion.
As to reasonableness, without descending into lawyers' pedantry it would generally be the case that any attempt to define reasonableness further is self-defeating. It is better to rely on the good sense of people who conduct their often rather onerous responsibilities effectively. The number of complaints about EROs is limited, despite all the difficulties that they encounter. We are happy that they are capable of applying good sense to that test of reasonableness. Once again, if difficulties arise that cannot be sorted out through the usual channels, we can always return to this, but I believe that we have drafted a framework which will enable proper sensible, individual decisions to be taken on a case-by-case basis.

Mr. Jeremy Hanley: Before my hon. Friend finishes, does he agree that almost certainly more members of the ethnic minorities fail to register to vote either as a result of a deliberate act by the landlord or through errors of omission, than there are those who put down the names of their children under the age of 18, either for deliberate or accidental reasons?

Mr. Mellor: Yes. The under-registration of ethnic minorities is a problem that we have sought to address through a real effort that we have made pursuant to the report of the Select Committee on Home Affairs on which my hon. Friend now sits. There is marked under-registration, I am relying on my memory, a fallible instrument, but it is around 7 per cent. nationally, and as high as 16·4 per cent. in inner London, I was rather shocked as an inner London Member to discover. The Home Office has been going through a series of seminars for EROs and has taken other steps to try to ensure that that figure is tackled and reduced.
Particular problems exist for the ethnic minorities. As a result of this exercise, EROS are more conscious than perhaps they were of ways in which that can be dealt with, and I hope that we shall see an improvement. We have certainly worked hard to try to obtain that. On that basis I commend the regulations to the House.

Question put and agreed to.

Resolved,
That the draft Representation of the People Regulations 1986, which were laid before this House on 13th May, be approved.

REPRESENTATION OF THE PEOPLE

Resolved,
That the draft Representation of the People (Scotland) Regulations 1986, which were laid before this House on 15th May, he approved.—[Mr. Mellor.]

Representation of the People

The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Nicholas Scott): I beg to move,
That the draft Representation of the People (Northern Ireland) Regulations 1986, which were laid before this House on 19th May, be approved.
I should emphasise that the regulations apply only to parliamentary and not to local government or Assembly elections which are covered under separate legislation. The main purpose of these regulations is the same as those which have already been moved and approved by the House, which is to extend the franchise to our citizens overseas and to allow holidaymakers an absent vote.
I do not wish to delay the House by recounting arguments which have already been put forward by my hon. Friend the Under-Secretary of State for the Home Department, but I shall, of course, respond to any points that are made about the particular impact of the regulations on Northern Ireland.
Of particular importance to Northern Ireland — the House may think of subsidiary importance to the main thrust of the regulations—is regulation 13, which amends the list of specified documents which have to be produced in order to obtain a ballot paper at elections in Northern Ireland. It is proposed, under regulation 13(a), that for the words "Article 12" we should substitute the words "Articles 8 and 12" to provide for an approved provisional driving licence as well as a full driving licence to be acceptable as a specified document, and under regulation 13(b) that
a British seaman's card issued in accordance with regulations made under section 70 of the Merchant Shipping Act 1970,
should also be acceptable. Those proposals are made in response to representations that we received in Northern Ireland after we had established the original list of specified documents. They represent a modest move in response to the representations that we received.
I commend the regulations to the House.

Mr. J. Enoch Powell: This is not an occasion for the Ulster litany of complaint against substantive legislation by Order in Council, for this is a statutory instrument made under United Kingdom legislation. Nevertheless, it is appropriate that these Northern Ireland regulations should be considered in their own right, since there are appreciable differences between them and those that apply in the rest of the United Kingdom. Some of the reforms introduced by the principal Act will have a somewhat different impact in Northern Ireland.
In Northern Ireland the functions of registration and returning officer are carried out by the electoral and deputy electoral officers, who are responsible directly to the Secretary of State. Therefore, in Northern Ireland the Secretary of State is in a more direct relationship with what happens on the ground and has, in a sense, a more intimate responsibility. Consequently, there are several points of a policy character to which it would be reasonable to invite the Minister to address himself. Intimation of some of the points that I intended to raise was given at the end of last week, and I hope that it reached the Minister in time for him to be able to consider them.
There is one matter of special concern to Northern Ireland. I am referring to the measures that were included

in the principal Act, I think in section 10, in the event of the Secretary of State forming the view that it was necessary to make special arrangements to prevent abuse in the context of absent voting.
Between now and the point at which these regulations come into force and are applied at a parliamentary election we are unlikely to glean any more experience from the working of elections. Therefore, it seems reasonable to suggest that the Secretary of State should be able to make up his mind and say whether he intends to use the powers contained in section 10 to bring schedule 1 into operation. I do not think that anything in the argument that occurred while debating the 1985 Bill or in the experience of the 1985 local government elections and the series of recent parliamentary elections has led to the conclusion that the elaborate precautions provided for in the first schedule will be necessary.
Indeed, that schedule is in a sense the vestigial remains of the original intention—which, fortunately, with the assistance of the House, was aborted — to deprive Northern Ireland of some of the advantages of the extension of absent voting which the principal Act made possible. It would be a pity if that increased facility were restricted by the use of section 10 and schedule 1, and I hope that if not tonight, at least in good time before the likelihood of a parliamentary election, the Secretary of State will say whether he intends — I hope not — to invoke those safeguards.
I come to matters of slightly less importance, which are significant to those concerned with the running and organisation of elections. Reference was made in the previous debate to the availability of forms. Regulation 5(2) does not contain any requirement that the forms used shall be exactly the same as the prescribed forms. They may be forms substantially to the same effect so that in practice, if candidates and their organisations are prepared to reproduce approximately the same forms as those set out in the schedule, there can be no question of candidates or electors being disadvantaged by a shortage of forms or, as in some cases, the unwillingness of electoral officers to provide an adequate number of forms.
Linked with that are the forms in connection with the claiming of absent and proxy votes, which are not prescribed in the regulations as I understand them. It will, therefore, be possible for candidates and their agents to compile forms which include all the particulars prescribed under the regulations and, provided that all those particulars are covered by the applications made on behalf of electors, the applications and claims should be valid.
If I have construed the regulations correctly, we have escaped from what has sometimes seemed to be the unnecessary red tape surrounding electoral forms. Both when they are prescribed, and when they are not prescribed, in schedules to the regulations it should be competent and possible for an efficient electoral organisation to provide for the elector to avail himself of all the facilities which are extended to him under the regulations.
Regulation 8 is headed "Misnomers". There is a slight puzzle about it. We all understand that a register should not be invalid because of an obvious mistake in the register — either because of an obvious mistake in the description of a place such as a town or street, or because of an obvious mistake in the spelling or printing of the name of an elector. I wonder whether that result, that an


"obvious mistake" — I am obviously using layman's language—will be ignored and will not invalidate the document or list in question, is achieved by the expression
such as to he commonly understood.
Often, the consequence of an error of that kind is precisely that it would not be "commonly understood". What we are trying to strike at under this article is that which is an error, and nothing but an error, and which any reasonable person would admit was an error. I wonder whether we have yet got the wording correct in the regulations for the purpose of defining what we understand to be the intention of regulation 8.
An important change for Northern Ireland is made in regulation 31. Hitherto, during the registration season, a draft register of electors, called the list of electors, has been published on distinctively coloured paper and has been the basis of the work on claims and objections and the production of a register as nearly correct as possible to come into force in February.
As I understand the regulations, that practice might be continued, but there is an alternative option to use the same procedure of three lists, A, B and C, which has been normal on the mainland for many years. It would be helpful if at an early stage, if not tonight, an indication were given about the policy which will be pursued in exercising that option in Northern Ireland. Clearly the option should be exercised in the same way by all registration officers. It should be a policy decision taken for the Province as a whole.
I do not think that anyone will disagree with me when I say that I believe that Northern Ireland interests would be served by going over to the Great Britain system of lists A, B and C. With the Great Britain system of A, B and C it is far easier to check whether a name has been inadvertently omitted from the existing register or whether all the names that should be added to the new register are to be so added. This is what the 13 list and the C list do for those who are concerned with elections on the mainland.
It would be an advantage in Northern Ireland if, instead of being confronted every November with a complete list, take it or leave it, as it were, which is the draft of the new register, those concerned with elections had the B list and the C list, as is made available on the mainland. Anecdotally, I would benefit myself from the availability of the B list, as it has been my custom ever since I have been a member of the House to call at every new house whose residents appeared on the new register. There has always been the convenience of having it served up on toast, as it were, on the B list. I do not urge that as the main reason, however, why I hope that that option will be preferred. I hope that the preference of the option will be adopted as a matter of policy for the Province as a whole and that the Secretary of State will, as soon as possible, indicate that that will be so.
Finally, I refer to regulation 66, to which reference has already been made in the context of the corresponding regulations for England and Scotland. Under the new dispensation, we shall no longer distinguish between several grounds of application for an absent vote, which have previously been differentiated. The provision for absent voting at a particular election covers those who are absent on holiday, those who are absent by reason of an exigency of their employment, it not being a normal incident of that employment, and those who are absent for some special personal reason. In addition—this is the matter that I want to emphasise— it covers those who

have moved their residence during the currency of the current register. All these positions are picked up by the omnibus provision in the principal Act, which is implemented by regulation 66.
Hitherto in Northern Ireland—we were grateful to the House for preserving the facility for an absent vote due to change of residence — there has been a precise definition of the geographical nature of the movement of residence which would entitle to an absent vote. In most cases, and certainly in the constituencies that I have contested, a move from one ward to another, irrespective of the actual distance involved, qualified for a postal vote. I do not think that that qualification. quite in that form, will apply under the new regulations and the new law, but it is necessary—at any rate it is highly desirable—that electors, candidates and those concerned with elections should have as clear an idea, as possible well in advance, of the sort of distance that will be taken into account by registration officers as rendering unreasonable the requirement to go to the allotted polling station.
This is more than a quibble and it is more than a complaint of the use of "reasonable" in the regulations. There should be a uniformity of standard applied in this respect between one constituency and another. For instance, it would be unreasonable that a registration officer in one area would regard 20 miles as a minimum distance of remove to qualify for a postal vote, whereas another officer might accept a claim where the distance was as little as 15 or 10 miles.
In constituencies such as those in Northern Ireland where considerable geographical difficulties are interposed by change of residence over a relatively short distance, I think that some guidance issued generally to registration officers, and known and settled in advance, for the Province as a whole, would result in greater fairness and would assist candidates and potential candidates in enabling the maximum number of electors to secure an absent vote.
I end on that note, because it is one of the characteristics of electioneering that our business in electioneering is to secure as many votes as possible for those who otherwise might not have the means to exercise them. Great effort will be devoted in the next year or two—certainly in Northern Ireland and, so far as I am concerned, in my constituency—to identify those who qualify at the moment for a standing absent vote and who are potential claimants for an absent vote for a particular election.
If that work is to be done effectively, we must have more definitions than the regulations provide of the interpretation that will be placed upon them by registration officers. That interpretation must he applied throughout the Province and adequate publicity must be given to it. I think that there might be adequate advance consultation on those points with the political parties concerned. I see that I have the Minister's assent on that point. Therefore, I shall conclude by saying something on which I shall also probably have his assent.
The work of the electoral officers and the deputy electoral officers in Northern Ireland over the past 12 or 13 years has produced a progressive improvement in the accuracy of the electoral registers, which are the essential basis of all fair and democratic elections. These officials devote themselves with considerable dedication to the improvement of the quality of the registers for which they are responsible. It must be said that the results that they


achieve mark a perceptible improvement from one register to another. In the past 13 years I do not think there has been one new register with which I have been concerned which has not represented an improvement on its predecessors.
We need the regulations. We need the interpretation of the regulations and the guidance for which I have asked if candidates, their agents and all those concerned with electors are to co-operate with the electoral officers in securing not merely an even more accurate register but the maximum list of absent and proxy voters under the new law as it will be when the new regulations come into force.

Mr. Scott: I am grateful to the right hon. Member for South Down (Mr. Powell) for initiating a separate debate because, as he rightly said, there are distinctive characteristics to the regulations which affect Northern Ireland. I echo his warm tribute to the chief electoral officer and other officials concerned with elections in Northern Ireland. They have made successive improvements in the accuracy of the register in Northern Ireland. That work will continue. I hope that we have not yet come to the end of that road of improving the accuracy of the register.
I take issue with the right hon. Gentleman about the chief electoral officer being responsible to the Secretary of State for Northern Ireland. The chief electoral officer is the returning officer in every constituency in Northern Ireland. He is not directly responsible to the Secretary of State for Northern Ireland. His responsibility, as returning officer and as registration officer, is to the law, as it is in the United Kingdom as a whole. He is responsible only to the law, and not to any Minister, for the way in which he answers for those responsibilities. At the end of the day, it would be for the courts, not Ministers, to decide whether he had discharged his responsibilities properly.
The right hon. Gentleman went on to raise a number of points. I am grateful for the fact that I was given, albeit by a somewhat circuitous route, notice of the points that he was likely to raise. The first point concerned schedule 1 to the Representation of the People Act 1985 which, as he said, empowers the Secretary of State for Northern Ireland to provide by order for a special polling station scheme to operate in the Province in certain circumstances. I emphasise that it was envisaged that those powers would be used only if there were evidence of serious abuse of postal voting facilities or if there were a risk of such serious abuse being imminent. If we were ever to move in that direction, the order implementing those provisions would need the prior approval of both Houses of Parliament. I can confirm that the Government have no present intention of activating the provisions of schedule 1.

Mr. J. Enoch Powell: The hon. Gentleman will understand that it would be clearly unacceptable if there were to be a snap decision with a relatively short time to run between the order being passed and the election taking place. Obviously, that would be avoided in the light of the general description of the Government's attitude to this matter which the hon. Gentleman has stated.

Mr. Scott: I am grateful to the right hon. Gentleman, who will, of course, know the background that convinced

the Government that it was necessary to have these powers in reserve. We differ on the need for the specified documents being introduced to counter the possibility of electoral abuse. There was always the danger that those who had hitherto exploited the weaknesses in the law to personate votes in Northern Ireland might move to exploit the absent voting provisions. These are reserve powers. We have no intention at the moment of using these powers. In order to do so, we would need the approval of both Houses of Parliament.
The right hon. Member referred to the forms that are used to register and to provide for absent voting claims. He described the present arrangements as smacking somewhat of red tape. I have had complaints from various sources in Northern Ireland of a shortage of those forms. It is clear that under regulation 5(2) party organisations and others can reproduce their own facsimile forms and pro formas for those purposes.
The only word of advice to parties that I would put on the record is that, if they are to produce their own pro formas for registration or for absent voting purposes, I hope they will liaise with the chief electoral officer and make absolutely sure that the documents are in the proper form and provide all the required statutory information so there can be no question about their validity when presented.
The right hon. Gentleman went on to raise a point about misnomers in regulation 8. In a sense, I have to stand by the fact that this wording is precisely that of section 50 of the Representation of the People Act 1983. Although it is difficult to describe this point exactly, any reasonable man would quickly understand what we are talking about. We are saying that a simple mistake in the course of the preparation of any such list should not invalidate the status of that list for the purposes of electoral registration. That has endured for the past three years without question. These regulations repeat that. If the right hon. Gentleman or any of his colleagues felt that there was a substantial danger of this causing any difficulty in terms of registration and if they were prepared to write to us, we would consider whether there was any real danger of that occurring. At the moment, I perceive none, and certainly no one has raised it since that provision was inserted in the 1983 Act.
The right hon. Gentleman's penultimate point was on the question of draft registers. He said that he preferred that system, which he perceived to be common on this side of the water, of the A, B and C lists. I have to tell him that already on this side of the water the movement is away from those procedures, with which he is even more familiar than I. Certainly it was the system with which I was familiar in my early days in the House. Already in Scotland no provision is made for the old A, B and C lists. It is moving to the system of draft registers which are proposed in these regulations. In England and Wales already well over a half of the constituencies are now covered by the new system of draft registers. The choice is for the chief electoral officer alone. It is his judgment. There is no question that in having the system of draft registers Northern Ireland is being treated any differently from England, Wales or Scotland.

Mr. J. Enoch Powell: I wonder whether this is a matter on which it would be helpful for the chief electoral officer to seek views with the aim of arriving, at as early a date as possible, at a system which would be generally


acceptable in the Province. There is a real practical difference between the operations which are required in one system and in the other. Clearly, it is desirable that we should know where we stand as soon as possible. Also, where we stand should be of the maximum convenience to as many people as may be. Therefore, if that could be promoted, it would help.

Mr. Scott: At the beginning of this short reply I recognised the independence of the chief electoral officer and his responsibility to the law, not to Ministers. I am sure that if representatives of the political parties in Northern Ireland wished to make representations to him, the chief electoral officer would take them into account in coming to his decisions.
Finally, the right hon. Gentleman referred to absent voting. I acknowledge that there is a change in the regulations as they affect Northern Ireland. However, the change is bringing them entirely into line with the practice in Great Britain. It will be for the returning officer to make up his mind as to whether there is a case for an elector not being able to get to his allotted polling station. It is an attempt to say that rather than someone having an automatic entitlement to be moved from one ward to another, the returning officer should be able to take into account a whole range of matters and make up his mind.
If the right hon. Gentleman's point is that there should be some general guidance across the Province as a whole, I shall certainly draw his remarks to the attention of the chief electoral officer—who is, after all, the registration officer throughout Northern Ireland—to see whether it is possible for him to produce some sort of common guidance. Again I emphasise his independence, but I shall certainly draw that to his attention. I am grateful to the right hon. Gentleman for providing me with the opportunity to clarify some of these points. I commend the regulations to the House.

Question put and agreed to.

Resolved,
That the draft Representation of the People (Northern Ireland) Regulations 1986, which were laid before this House on 19th May, he approved.

STATUTORY INSTRUMENTS, &c.

MERCHANT SHIPPING

Motion made, and Question put forthwith pursuant to Standing Order No. 79(5) (Standing Committee on Statutory Instruments &amp;c.)
That the draft Merchant Shipping (Cargo Ship Construction and Survey) Regulations 1984 (Amendment) Regulations 1986, which were laid before this House on 22nd May, he approved.
That the draft Merchant Shipping (Passenger Ship Construction) (New and Existing Ships) (Amendment) Regulations 1986, which were laid before this House on 22nd May, be approved.
That the draft Merchant Shipping (Fire Protection and Fire Appliances) (Amendment) Regulations 1986, which were laid before this House on 22nd May, be approved.
That the draft Merchant Shipping (Musters and Training) Regulations 1986, which were laid before this House on 22nd May, be approved.

That the draft Merchant Shipping (Life-Saving Appliances) Regulations 1986, which were laid before this House on 22nd May, be approved.
That the draft Merchant Shipping (Radio Installations) (Amendment) Regulations 1986, which were laid before this House on 22nd May, be approved.
That the draft Merchant Shipping (Chemical Tankers) Regulations 1986, which were laid before this House on 22nd May, he approved.
That the draft Merchant Shipping (Gas Carriers) Regulations 1986, which were laid before this House on 22nd May, be approved.
That the draft Merchant Shipping (Life-Saving Appliances Regulations 1980) (Amendment) Regulations 1986 which were laid before this House on 16th June, be approved.
That the draft Merchant Shipping (Dangerous Goods) (Amendment) Regulations 1986 which were laid before this House on 16th June, he approved. — [Mr. Archie Hamilton.]

Question agreed to.

EUROPEAN COMMUNITY DOCUMENTS

DEFINITION OF FISHING VESSEL CHARACTERISTICS

Motion made, and Question put forthwith pursuant to Standing Order No. 80(5) (Standing Committees on European Community documents.)
That this House takes note of European Community Document No. 4676/86 laying down definitions of fishing vessels' characteristics and measurements; and supports the Government's view that, whilst harmonisation in this field is generally to be welcomed, Community legislation should not, as far as possible, impose further burdens on the fishing industry.—[Mr. Archie Hamilton.]

Question agreed to.

TRADE AND INDUSTRY

Ordered,
That Mr. Bernard Conlan be discharged from the Trade and Industry Committee and Mr. Richard Caborn be added. — [Sir Marcus Fox, on behalf of the Committee of Selection.]

AGRICULTURE

Ordered,
That Mr. Nicholas Baker be added to the Agriculture Committee.—[Sir Marcus Fox, on behalf of the Committee of Selection.]

EDUCATION, SCIENCE AND ARTS

Ordered,
That Mr. Sean Hughes be discharged from the Education, Science and Arts Committee and Dr. Mark Hughes be added. — [Sir Marcus Fox, on behalf of the Committee of Selection.]

ENVIRONMENT

Ordered,
That Mr. Michael Stern be added to the Environment Committee.—[Sir Marcus Fox, on behalf of the Committee of Selection.]

SCOTTISH AFFAIRS

Ordered,
That Sir Hector Monro be discharged from the Scottish Affairs Committee and Mr. Alexander Pollock be added.—[Sir Marcus Fox, on behalf of the Committee of Selection.]

Bolton (Hospital Facilities)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Archie Hamilton.]

Mr. Peter Thurnham: I am grateful for this opportunity to put the case for Bolton's new hospital facilities. With permission, I shall give 77 different reasons why they are so desperately needed.
I have been applying for an Adjournment debate since the end of April, when the people of Bolton were dismayed to learn that there was to be an 18-month delay to the start of work on Bolton's already long overdue additional hospital facilities. I must express in the strongest possible terms my dissatisfaction over both the delay itself and the stated reason. It is said to be the result of overscheduling by the North-Western regional health authority in its 10-year plan, announced last year. Apparently, the North Western regional health authority has planned an over-commitment in the earlier part of its plan. Everything is said to be certain in the 10th year of the plan, but over-commitments have been planned in the fourth year, such that
Districts must appreciate that delays must occur … by up to 2½ years".
The latest programme is now said to be realistic.
Therefore, I now call on the Government to carry out an urgent inquiry into the scheduling arrangements for capital spending in the regional health authority, and if necessary to review the provision of funds to enable construction of Bolton's new facilities to commence without delay.
I have been pressing the need for those new facilities since I was elected. The then Minister for Health, the present Paymaster General, stated during his visit in the general election of 1983 that
Bolton's case is burnt into my mind".
We were pleased when in June of the following year, my hon. Friend the Parliamentary Under-Secretary's predecessor, the present Minister for Housing, Urban Affairs and Construction, visited Bolton to see for himself the existing facilities, which are split between the two sites of the general hospital and the royal infirmary. As a result of that visit, when I gave him a four-page list of reasons why Bolton needed the new facilities, an urgent review of the timetable for the long-promised improvements was put in hand. It was with great relief that the people of Bolton heard in April last year that Bolton's case had been accepted by the regional health authority, with a programmed start date of January 1988 for the £16·5 million phase 1, and 1994–95 for the £17 million phase 2.
The importance of the project lies not only in its significance to the health of the people but in its impact on the town's general morale and economic well-being. Employment in Bolton's National Health Service has risen from some 3,500 in 1979 to 4,500 currently. Even after efficiency savings of £400,000 due to competitive tendering, the projected new facilities contribute to a forecast further increase of 600 NHS jobs in Bolton, including 400 nurses. In a town with such high unemployment, the importance of such a project cannot be overestimated.
Historically, Bolton, along with other towns on the north-west of the Greater Manchester conurbation, has been deprived of health services while resources have been

concentrated on the teaching hospitals in the centre of Manchester under the influence of powerful medical and teaching lobbies. As a result Bolton, along with Wigan, Bury and Oldham, has poor facilities and capital stock. However, while capital developments are in progress at Bury and Oldham. Bolton has fallen far short of its requirements. Both my hon. Friend the Member for Bolton, West (Mr. Sackville) and I invite the Minister to visit Bolton to see for himself the pressing need for work to start now, without delay. As I shall describe, the evidence is overwhelming.
Managing for years on a make do and mend basis, Bolton is now over 12 per cent. short of its resources allocation working party allocation, and 18th out of 19 in the RAWP league table in the north-west region. By 1993, if activity targets are achieved, the district will be at only 80 per cent. of financial target allocation, representing a shortfall of £9·5 million a year.
Bolton health authority, serving an area of some 54 square miles, has 1,315 beds, but they are split between two main sites— the general hospital has 872 beds and the royal infirmary 233 beds. Those two sites are approximately one and a half miles apart, and together provide for the acute and emergency admissions.
The split between the two sites causes difficulties and confusion. For instance, the casualty reception is at the royal infirmary, but the coronary care unit is at the general hospital. In consequence, ambulance drivers may make mistakes, and skilled anaesthetists, together with paediatricians and surgeons, have to spend time travelling from one hospital to another. The accident and emergency unit at the royal infirmary is one of the two busiest in the north-west region, with 72,000 attendances in 1984.
Despite being so busy and having to serve the needs of a population of a quarter of a million, Bolton is the only district in the north-west without proper intensive care facilities and without specially trained staff. On present projections, it will be 1994 before Bolton gets its target of 13 intensive care units. Meanwhile, there are but three high dependency beds at the infirmary. The one at the general hospital is only partially equipped by voluntary donations from the Women's Royal Voluntary Service.
How many such districts are there in the south-east of England which do not have intensive care facilities? What would the people in my hon. Friend the Minister's constituency of Wycombe say if their hospital had no intensive care facilities?
Both the region and the Department know that childrens' lives are at risk without centralised children's services. There is an acknowledged need for 10 operating theatres, but we have only seven. On a visit last Saturday, I found that two out of the three operating theatres at the general hospital are so seriously substandard that a temporary facility is having to be provided until a full upgrading scheme can be afforded. The air conditioning system is no longer properly operative, and there is therefore a potential risk of infection.
The need for improved health services in Bolton is undeniable. The mortality figures show that the expectation of life in Bolton is significantly below average. People born elsewhere in England can expect to live one or one and a half years longer than people in Bolton. Why should that be so? There are a number of contributory factors. Bolton's climate, which benefited its cotton industry, is not so good for its inhabitants. The atmospheric pollution in Bolton has only recently been


reduced. Historically, Bolton had the highest sulphur dioxide concentration in the north-west but now peak levels only occasionally exceed the recommended level of 60 microgrammes per cubic metre. Unfortunately, Bolton's rivers, the Tonge and the Irwell, are still among the worst polluted rivers in the north-west, whose rivers are among the worst in the country.
Two reports have highlighted the deficiencies in Bolton's health. In 1980 the Black report found that Bolton was among the 10 worst areas in the country as measured by standardised mortality rate. The second, the Holland report of 1983, placed Bolton 97th out of 98 for areas of the country which suffered above average "avoidable" deaths from preventable diseases for the period 1974–78. In the next four-year period, 1979–83 the town was still placed in the bottom third of the country.
These reports show the effects of socio-economic factors, which are further revealed by estimates that 1 per cent. of hospital bed clays are accounted for by elderly patients without suitable homes to return to. The district medical adviser has said that it would take decades for Bolton's health to overcome these difficulties and for Bolton to be rid of its image as a sick town.
The people of Bolton are not suffering from a failure to see the doctor. The number of prescriptions shows that Bolton's population takes nearly 9 per cent. more medicines per head than the country as a whole, at a cost 4 per cent. higher than the England-Wales average.
The evidence that Bolton needs improved health services is overwhelming. Indeed, on this evidence, Bolton requires above average facilities. The DHSS approval for phase 1 established an essential need for 17 different facilities—accident and emergency, dispensary, fracture clinic, out-patients department, X-ray, rehabilitation, ear, nose and throat, and dental out-patients, theatres, inpatient acute beds, coronary care and intensive therapy beds, day care unit, staff changing, administration departments, medical records, kitchen, staff dining room and doctors on-call accommodation.
The waiting time for a consultation with a rheumatologist is 39 weeks, and ophthalmic waiting times are substantially above the national average at 15 months. As for staffing levels, there is a shortage of staff for mental illness patients. For consultant radiologists, the district is within the worst 5 per cent. in the country, based on work load in 1984–85. For in-patient hospital treatment rates, Bolton again comes near the bottom of the North-Western regional health authority league tables—16th out of 19 for district specialties.
Excluding mental handicap, there is a shortfall of 241 hospital beds, of which 42 are general medical, and 27 are orthopaedic. So the principle of equal access to health care is possible only if Bolton's patients are referred to other districts.
At 12 per cent. below the target set by RAWP, Bolton is short of £3 million on general revenue, and a further £3 million on revenue related to capital. On capital account, Bolton's deficiency is £21 million, the second worst in the region, which is again acknowledged in the commitment to phase I of the planned expansion to the general hospital for which some £16·5 million is budgeted. The region's outline strategy report calls for cash to be allocated on an efficiency basis. Bolton already shows a lower than average cost per patient, perhaps, as I found on Saturday, because some beds are occupied by three or four different patients each day. We are pleased with the recently

completed geriatric facilities, and the Princess Anne maternity unit has long been held up as a paragon to other districts. The unit had a throughput of 3,000 per annum when it opened in 1977, increasing to more than 4,500 by 1985.
Besides making efficient use of National Health Service facilities the people of Bolton have also provided voluntarily. In the past two years £130,000 was successfully raised in an appeal for new medical equipment, and for many years the WRVS has provided many hundreds of volunteers for hospital services. Bolton's initiatives for care in the community were accepted by the previous Minister for Health as some of the best in the country.
In conclusion, I trust that the Government will accept that resources must be found to fund the much-needed new facilities without further delay. Bolton with its split sites is in an impossible position to plan if resources are not made available to go ahead with phase 1 as soon as possible. Surplus capacity in the new oversized boilerhouse and duplication of units in the present old buildings require extra staff and expenditure without patient benefit. The general hospital is the right site for development as the infirmary lacks rooms and the general is the only site large enough for construction of the required services.
The history of promises for the building of the phase 1 extension of the general hospital started in the 1978 when it was promised that the extension would begin in 1984. By 1980 the date had slipped to 1985 and in 1981 it slipped a further year to April 1986. In 1983 it was scheduled to begin in October 1986, to be completed in 1989. Last year it was scheduled to start in January 1988, but we are now told that it is to be further delayed, with a start date scheduled for September 1989 and completion three years from that date.
An early start must be made on the X-ray and pathology units which, with the most recent delay to phase 1, means extra costs of some £830,000. There will be ultimate economies from the provision of day care and centralised facilities, but I am sure that my hon. Friend the Minister would wish to support both the very necessary and long overdue capital investment and the allocation of revenue to run it. By calling for a review of capital programming in the North-West regional health authority and by restoring the original schedule the Government could save not only many hundreds of thousands of pounds of extra costs incurred as a result of the delays but, most importantly, the health of the people of Bolton.
I call upon the Government to ensure that construction work starts without further delay.

The Parliamentary Under-Secretary of State for Health and Social Security (Mr. Ray Whitney): I am happy to have the opportunity to respond to my hon. Friend the Member for Bolton, North-East (Mr. Thurnham). I am sorry that he has had to wait since April for this debate, but he made excellent use of the opportunity once it arose.
My hon. Friend is extremely concerned about the plans to rebuild Bolton general hospital. Before going into detail about that, I should like to say a word or two about the very large scale of investment in the Health Service in the north-west region under the present Government. As my hon. Friend knows, he and we can be justly proud of our record on this. The region is better funded and better managed and is treating more patients than ever before.
Since 1978–79, Health Service spending in the region has increased from £380 million to £807 million in 1984–85 — a growth in real terms of 19·8 per cent. Taken together with the region's allocations for 1985–86 and 1986–87, expenditure in real terms in the region is forecast to rise by 23 per cent. compared with an average of 19 per cent. for health authorities in England as a whole. Those figures include the recent £50 million increase to take account of particular pressures from the National Health Service review body pay awards. This growth comes from real growth in Health Service resources and from redistribution from historically well-off regions in the south to the north.
If we look at how the north-west region has moved towards its resource allocation working party target, we see that in 1977–78 it was 11 per cent. below and that it has advanced to 0·8 per cent. below this year. That comes from making better use of existing resources. The region estimates that its cost improvements for 1985–86 will be 2·3 per cent. That includes cash releases, through efficiency, of £10·721 million. I understand that Bolton is making its contribution to this picture. For example, on domestic services £600,000 will be released this year alone through competitive tendering for additional health services in the area. Two contracts have been awarded: one in-house, covering the Bolton general hospital, and one to Crothalls, an outside company.
In addition, the region has had and continues to have the second highest capital allocation in England. This year it amounts to £71·517 million. On a per capita basis the region's basic capital allocation works out at £14·89 for every man, woman and child in the region, and compares with the average for England as a whole of £12·70.
The Government's investment is enabling us to tackle the legacy of health services problems in Bolton and elsewhere in the region. Let us be clear what the problems are. They are not with the services provided. All who work in Bolton's health services—my hon. Friend gave a figure of about 4,000 — give good service to Bolton's people. The problem relates to the amount of service that they can provide. Health services are indeed unequally spread across the region. Bolton people find it harder to gain access to health services than do people in the best served north-western districts, notably south Manchester and Trafford. That is not new. The problem was among the backlog of unattended needs left behind by the Labour Government, and we must face it now. The Government care about Bolton, which is why we have proposed that there should be development of Bolton general hospital.
We have already given approval in principle of phase one, and the regional health authority plans a second phase. The total redevelopment costs will he more than £38 million. It is an ambitious hospital building and rationalisation programme. Work on phase one will begin in 1989. Other preparatory work must be done before then — for example, drains must be laid. The phase one development will include 148 acute beds, eight intensive therapy beds, four X-ray rooms, an accident and emergency department, three theatres and seven coronary care beds at a total cost of £16·541 million.
My hon. Friend referred to problems about timing, but before the work can be carried out much has to be done. Resources are having to be released from over-provided districts, and the region has had to produce a manageable capital programme. That has certainly given the impression of slippage, to which my hon. Friend referred. As he said, the region's capital programme was overcommitted in the early years because the regional health authority was advised that, for planning reasons, overcommitment can act as an incentive to progress and assist in responding to slippage, so that maximum use is made of capital allocations.
Whatever the reasons for the approach, the result was an over-ambitious capital programme. To have rebuilt Bolton's general hospital at the date previously suggested would have depended on other planned and equally necessary schemes suffering delays unforeseen when the programme was drawn up. So a capital programme on that basis was over optimistic and always at risk of disappointing someone. Morever, recent experience of the construction industry, at least in the north-west region, is that delays are not occurring to the same degree. The regional health authority decided that overcommitment was no longer the right way to cope with slippage. That has been the subject of discussion between the region and Ministers. The region has produced a programme which is affordable in successive years, not overcommitted and realistic. There is no need for further conjecture, and I assure my hon. Friend's constituents that they have a date for the hospital rebuilding which is as firm as possible. We can all look forward to it with confidence.
I understand the pressures to which my hon. Friend referred, but I ask him to note that, in addition to the general hospital rebuilding, there has been much capital spending in Bolton in recent years. Indeed, it totals £16 million since 1982. For example, a mental illness unit is being built at a cost of £1·9 million. Next year, £320,000 will be spent upgrading the X-ray department, and £773,000 on expanding a pathology laboratory. They are demonstrations of our commitment. I recognise that my hon. Friend would have wished progress to be much faster. I hope that he accepts that the earlier forecasts were made with the best of intentions. I understand the disappointment that they caused, but I hope that he accepts that the movement of the revenue funding and the commitment to the steadily increasing capital funding—an increase on an already significant amount of capital expenditure—will bring Bolton up to the standards that he and I want for his constituents.
I hope that my hon. Friend accepts that we are moving in the right direction and that significant increases in resources are being devoted to improving health care in Bolton, to which he referred so effectively. I ask him to carry back to his constituents my commitment that the timetable that has now been established has every prospect of being adhered to.
Question put and agreed to.
Adjourned accordingly at twelve minutes past One o'clock.